RBI asks banks to shift from LIBOR to alternative reference rates by Dec 31




The Reserve Bank on Thursday asked banks financial institutions to use any widely accepted alternative reference rate (AAR) instead of LIBOR (London Interbank Offered Rates) as the reference rate for entering into new financial contracts.


The Reserve Bank’s directive follows a decision of the Financial Conduct Authority (FCA), UK which on March 5, 2021 had announced that all LIBOR settings would either cease to be provided by any administrator or would no longer be representative.





In order to deal with the emerging situation, the RBI has asked banks financial institutions to “cease entering into new financial contracts that reference LIBOR as a benchmark instead use any widely accepted alternative reference rate (ARR), as soon as practicable in any case by December 31, 2021.”

The financial institutions, it suggested, should incorporate robust fallback clauses in all financial contracts that reference LIBOR the maturity of which is after the announced cessation date of the LIBOR settings.


The RBI has also advised the financial institutions to cease using the Mumbai Interbank Forward Outright Rate (MIFOR), a benchmark which references the LIBOR, latest by December 31, 2021.


The Reserve Bank of India (RBI) had in August 2020 asked banks to frame a board-approved plan, outlining an assessment of exposures linked to LIBOR steps to be taken to address risks arising from the cessation of LIBOR, including preparation for the adoption of the ARR.


While certain US dollar LIBOR settings will continue to be published till June 30, 2023, the extension of the timeline for cessation is primarily aimed at ensuring roll-off of USD LIBOR-linked legacy contracts, not to encourage continued reliance on LIBOR.


“It is, therefore, expected that contracts referencing LIBOR may generally be undertaken after December 31, 2021, only for the purpose of managing risks arising out of LIBOR contracts (e.g. hedging contracts, novation, market-making in support of client activity, etc.), contracted on or before December 31, 2021,” the RBI said.


It has also asked banks financial institutions to incorporate robust fallback clauses, preferably well before the respective cessation dates, in all financial contracts that reference LIBOR the maturity of which is after the announced cessation date of the respective LIBOR settings.


The central bank also said it will continue to monitor the evolving global domestic situation with regard to the transition away from LIBOR proactively take steps to mitigate associated risks in order to ensure a smooth transition.

(Only the headline picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Moderna testing mRNA flu vaccine in clinical trial


Moderna has begun testing an mRNA flu vaccine in clinical trials, with the company announcing Wednesday that the first participants had been dosed in the Phase 1/2 study. The vaccine, mRNA-1010, is Moderna’s first seasonal flu vaccine candidate to enter clinical trials will target influenza A H1n1, H3N2, influenza B Yamagata Victoria.  

The company is aiming to enroll 180 participants ages 18 years older in the trial, eventually aims to study combination vaccines to target multiple respiratory viruses such as SARS-CoV-2 RSV. 

“We are pleased to have begun this Phase 1/2 study of mRNA-1010, our first mRNA seasonal flu vaccine candidate to enter the clinic,” Stephane Bancel, Moderna’s CEO, said in a news release. “Respiratory combination vaccines are an important pillar of our overall mRNA vaccine strategy. We believe that the advantages of mRNA vaccines include the ability to combine different antigens to protect against multiple viruses the ability to rapidly respond to the evaluation of respiratory viruses, such as influenza, SARS-CoV-2 RSV.”

DELTA COVID-19 VARIANT NOW DOMINANT IN US, CDC PREDICTS

Traditionally, annual influenza vaccines see efficacy of between 40-60%, but the new mRNA-based COVID-19 shots saw rates upwards of 90%. Moderna’s COVID-19 jab, specifically, saw 94.1% efficacy in those who had received two doses. 

CLICK HERE FOR COMPLETE CORONAVIRUS COVERAGE

“Our vision is to develop an mRNA combination vaccine so that people can get one shot each fall for high efficacy protection against the most problematic respiratory viruses,” Bancel said. “We look forward to advancing our core modality of prophylactic mRNA vaccines so that we can continue to make an impact on global public health.” 



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US hospitals not ‘adequately’ prepared for next pandemic, study finds


A 10-year analysis of hospitals’ preparedness for pandemics other mass casualty events in the years prior to COVID-19 is warning that the nation’s health care system may not be adequately prepared for the next one. For the study, a team of researchers from the University of MarylSchool of Medicine University of MarylMedical Center used a surge index tool called Hospital Medical Surge Preparedness Index (HMSPI) to score data from more than 6,200 hospitals nationwide. 

The hospitals had partaken in the American Hospital Association annual surveys. The team also used census data to determine population estimates in various cities geographic service area combined it with the survey information to calculate the HMSPI score. 

Metrics evaluated in the HMSPI included staff, supplies, space such as the total number of beds that staff can handle, systems, including a framework for enabling electronic sharing of information. 

DELTA COVID-19 VARIANT NOW DOMINANT IN US

While the team found varying degrees of improvement in some areas over the years, they also said that the scores indicated “ideal readiness had not yet been achieved in any state before the COVID-19 pandemic.” 

Between 2005 2014, Montana experienced the largest increase in HMSPI scores, with the smallest increase noted in Nevada. The improvements across the country appeared to plateau in the final year of data. 

HOSPITALS PRESS WORKERS TO GET VACCINATED AS COVID-19 VARIANTS SPREAD

The team concluded that “after more than $5 billion of federal investments in disaster preparedness since the 9/11 attacks, the nation’s hospitals health care systems continue to struggle with disaster readiness.”

The full results were published last month in the Journal of Healthcare Management, according to a news release.

“This is just the starting point,” David Marcozzi, M.D., professor of emergency medicine at UMSOM chief clinical officer/senior vice president at UMMC study lead author, said. “We need to better understthe ability of our nation’s hospitals to save lives in times of crisis.” 

Marcozzi said follow-up research could involve data from the COVID-19 pandemic to see how hospital preparedness impacted patient outcome. 

CLICK HERE FOR COMPLETE CORONAVIRUS COVERAGE

“This pioneering work is a needed advancement that could allow for a transparent assessment of a hospital’s ability to save lives in a large-scale emergency,” Marcozzi said. “The COVID-19 pandemic demonstrated that there is still plenty of room for improvement in the ability of our nation’s health care system to triage manage multiple patients in a crisis that translates into lives lost, unnecessarily. Our research is dedicated to those who lost their lives in his tragedy other mass casualty events. We can do better.” 



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Covid-19 origins mirror SARS’s genesis in animals, study finds




Early Covid-19 cases traced to markets in Wuhan, China, mirror the initial spread of SARS 17 years earlier, scientists said in a paper that concludes that an animal contagion is the most likely explanation for the pandemic’s genesis.


The epidemiological history of the SARS-CoV-2 virus is comparable to previous animal market-associated outbreaks of coronaviruses offers a simple route for human exposure, Edward Holmes, Andrew Rambaut 19 other researchers said in a review of the scientific evidence pertaining to the pandemic’s origins.





The paper was released Wednesday ahead of peer review, is being prepared for submission to a journal for publication, one of the authors said. It gives a detailed explanation for SARS-CoV-2’s genetic signatures, early epidemiology research undertaken at the Wuhan Institute of Virology.


“It’s the first really systematic sift through all the data,” Holmes, a laureate professor who studies evolutionary biology at the University of Sydney, said in an email.


There has been a lot of news coverage of Covid’s origins in recent months, “much of it speculation some of it simply misinformation,” he said. “We thought it was important to go back to the core scientific data clearly calmly work through what it told us.”


ALSO READ: ‘I’m not naive’: Last only foreign scientist in Wuhan lab speaks out



Debate about Covid’s emergence has coalesced around two competing ideas: a laboratory escape or a spillover from animals. The authors, who also include Nobel Prize winner Peter Doherty Wellcome Trust Director Jeremy Farrar, said there is no evidence that SARS-CoV-2 has a laboratory origin, the suspicion stems from the coincidence that the pandemic virus was first detected in a city that houses the institute’s maximum biosafety lab that studies coronaviruses deadly diseases, such as Ebola.


The lab accident theory “cannot be entirely dismissed,” but it’s very unlikely, the authors said, compared with “the numerous repeated human-animal contacts that occur routinely in the wildlife trade.”


‘Collision Course’


Failure to investigate understthe contagion’s viral origin through collaborative carefully coordinated studies “would leave the world vulnerable to future pandemics arising from the same human activities that have repeatedly put us on a collision course with novel viruses,” they wrote.


Wuhan is the largest city in central China with multiple animal markets is a major hub for travel commerce, well connected to other areas both within China internationally, the authors said. The link to Wuhan, therefore, more likely reflects the fact that pathogens often require heavily populated areas to become established.


Based on epidemiological data, the Huanan wholesale seafood produce market in Wuhan was an early epicenter of SARS-CoV-2 infections, the researcher said. Two of the three earliest documented Covid-19 cases were directly linked to the market that sold live, wild animals, as were 28% of all cases reported in December 2019. Overall, 55% of cases during that month had an exposure to either the Huanan or another market in Wuhan, with these cases more prevalent in the first half of that month.


Although no bat reservoir nor intermediate animal host for SARS-CoV-2 has been found so far, the virus’s transmission from one animal species to another is likely to go undetected, the authors said. Initial SARS-CoV-2 cases aren’t likely to have spread the virus to other people, only a small subset of spillover events from animals to humans results in major outbreaks.


The pandemic virus evolved in a host environment “highly similar, if not identical,” to a bat coronavirus that’s considered the closest match to SARS-CoV-2, researchers at Sun Yat-Sen University Guangzhou University said. Their research, released July 1 on a preprint server, found it would be difficult to duplicate SARS-CoV-2 in cell culture under laboratory conditions.

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Paytm cut marketing spend more than the competition: Bernstein report




Paytm, whose initial public offering is expected later this year, has cut down its marketing spend as it focuses on building revenue, competes with PhonePe Google Pay in the super application (app) space, according to a Bernstein report.


“Within the UPI (unified payments interface) super-apps, PhonePe leads the pack on overall UPI market share has grown market share relative to Google Pay Paytm. Phone Pe Google Pay continue investing in providing customer incentives spend on marketing at 2.5-3.0x revenue (FY20 MCA filings). Paytm has streamlined marketing spend from 1.2x revenue in FY17, to 0.4x in FY20, now at 0.2x of revenue (FY21), while growing merchant payments share across wallets, UPI, PoS, online payments,” said analysts Gautam Chhugani Manas Agrawal.





The report further said the National Payments Corporation of India’s recent norm that limits digital payment apps’ share in the overall volume of transactions on the unified payment interface (UPI) at 30 per cent would impact PhonePe Google Pay more than Paytm.


“This would imply PhonePe Google Pay would have to dial down their customer incentives to bring their market share gradually towards the 30 per cent cap,” said the Bernstein analysts. The cap would not impact Paytm Payments Bank.


As per a communication from NPCI, starting from January, 2021, all UPI payment apps will be subjected to a three-level threshold monitoring by NPCI with some exemptions. At the first level, the TPAPs payment service provider (PSP) banks will receive an NPCI communication on breaching the 25-27 per cent mark of transaction volumes. At the second level, between 27.1 to 30 per cent, they will receive a second alert, the TPAP must provide evidence of actions taken in compliance to the volume cap.


“The super-app battle is heading beyond just pushing marketing dollars for market share (PhonePe Google Pay spend 2-3x revenue, as UPI market share caps kick in. What will matter is financial services monetization including delivery of credit-on-app building a financial services suite – for both in-store online merchants”.


The analysts also said Paytm was building a full-stack payments suite beyond UPI – point-of-sale (PoS), Paytm payments gateway, Paytm Payments Bank, building a financial services platform – with focus on Pay-later lending (Paytm Postpaid) wealth management/Insurance (Paytm Money).


Additionally, the biggest transaction driver in the UPI space is the P2M (person-to-merchant) segment in which Paytm has solidified its lead. Paytm has been “growing merchant payments share across wallets, UPI, PoS, online payments,” said the report.

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Business Standard has always strived hard to provide up-to-date information commentary on developments that are of interest to you have wider political economic implications for the country the world. Your encouragement constant feedback on how to improve our offering have only made our resolve commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed updated with credible news, authoritative views incisive commentary on topical issues of relevance.

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