IBOR reform is coming 

What should you, as a financial institution, do to prepare?

Transition away from the Interbank Offered Rates (IBORs), represents one of the biggest challenges facing financial services firms. In 2017 the head of FCA announced that due to insufficient data to sustain the LIBOR rate, this benchmark rate will be discontinued at the end of 2021. LIBOR will be replaced by various risk free rates (SOFR for USD, €STR for EUR, SONIA for GBP etc.) The transition to risk free rates impacts financial services firms, corporates as well as the customers and will change the market environment as a whole.

While LIBOR will be terminated completely by the end of 2021, the euro has the benefit of two possible options for the market participants to use – EURIBOR and €STR. Will market participants continue to use EURIBOR or transition to €STR? The answer is currently not so clear.