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Perspectives

LIBOR transition resources

Latest news and strategies for LIBOR transition

Regulators in the US and abroad have indicated that firms will likely need to transition from LIBOR by the end of 2021. LIBOR impacts organizations in numerous ways, from LIBOR-based loans to core operating processes. This page serves as a one-stop shop for the latest on the LIBOR transition.

LIBOR transition: Setting your firm up for success

Regulators globally have signaled that firms should transition away from the London Interbank Offered Rate (LIBOR) to alternative overnight risk-free rates (RFRs). Andrew Bailey, chief executive of the United Kingdom Financial Conduct Authority, has stipulated that this should happen by the end of 2021.

However, the rate is so embedded in the day-to-day activities of providers and users of financial services that completing transition will be a complex and time-consuming task which could give rise to major risks for firms and their customers. It is vital that boards take action now, but how do they navigate these issues, against a backdrop of uncertainty, and deliver one of the (if not the) biggest transformation projects they have ever faced? This report is designed to help board members and executives to understand what is needed to drive the transition.

US LIBOR transition newsletter

The Alternative Reference Rate Committee (ARRC) released a consultation on swaptions impacted by Central Counterparty Clearing Houses' (CCPs) discounting transition to Secured Overnight Financing Rate (SOFR). The Consultation looks to gather feedback on the ARRC’s proposed recommendations on compensation methodology for USD LIBOR swaptions that may likely be affected by the discounting change for cleared derivatives from the Effective Federal Funds Rate (EFFR) to SOFR, expected to occur from October 16, 2020 by the Chicago Mercantile Exchange (CME) and London Clearing House (LCH). Responses for the consultation were due on March 9, 2020.

LIBOR transition: An industry update and recent lessons learned

With the financial transition targeted for 2021 drawing near, financial services organizations are moving quickly to prepare themselves for a post-LIBOR world. Moreover, regulators are increasing their scrutiny of organizations' preparations and focus areas. We'll discuss:

  • The influence that global regulators are having on LIBOR transition and the adoption of alternative reference rates.
  • A snapshot of where organizations are in the broader transition life cycle.
  • An in-depth look into pain points organizations is facing as they transition away from LIBOR.

Participants will gain new insights on the approaching transition away from LIBOR, how regulators are preparing, and some of the lessons learned as organizations make their own preparations.

LIBOR transition: An industry update and recent lessons learned

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Impacts on the investment management sector

The LIBOR transition risk spans the economic risk of client portfolios, operational risk, funding risk, conduct risk, and legal risk. Given the importance of LIBOR across the financial services industry, the LIBOR transition poses significant transition risk if not addressed in a timely and comprehensive manner. As such, investment management firms need to have appropriate strategic planning and risk mitigation initiatives in place. Read more about some strategic planning and risk mitigation initiatives to consider, including: development of program governance, business impact analysis, identification of risks and timely implementation of risk mitigation, coordination across portfolios/funds, functions and geographic regions, firm-wide risk assessment, and development of strategic LIBOR transition roadmap for both investor and internal considerations.

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LIBOR Transition for Investment Managers
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