Reduce disruption, streamline processes and improve agility. Prepare your firm for change.
The London Interbank Offer Rate (‘LIBOR’) will cease to be in effect from 31 December 2021. Financial institutions and the users of financial products which use LIBOR to price these products must act to protect their business from the financial shocks which may result from an unmanaged transition to alternative reference rates. Regulators expect firms to act now to plan and implement the necessary changes to manage the complex transition.
For many, delays could mean disruption to operations, performance and profits. However, leading firms will benefit from the transition’s changes by using the opportunity to make strategic decisions, enhance client relationships, take advantage of technological solutions, manage risks, and create commercial opportunities. The task of transitioning away from LIBOR is a complex and transformational programme, and is currently underway. Is your firm ready?
Along with our team of dedicated LIBOR professionals, technology and sector expertise, we can help you find ways to progress and succeed - even in periods of uncertainty. To deliver meaningful change, we can work with you to implement the following key components of a comprehensive LIBOR transition plan.
It’s important to establish and manage a program governance structure with appropriate executive leadership, including stakeholders from impacted businesses and functions across the company. We help you manage and monitor transition progress whilst also conducting comprehensive assessment to identify areas of exposure and develop a strategy for remediation activities.
We help you identify, enhance and validate all pricing and risk management models required to switch from LIBOR to new rates. This includes developing a framework for simulation uncertainty of new rates for capital and funding requirements.
Your transformation could involve switching potentially hundreds of thousands of LIBOR-based contracts to RFRs. We work with you to identify, amend and digitise all relevant contracts worldwide to remove LIBOR and negotiate new terms with counterparties at speed.
For companies that offer LIBOR-linked financing, developing a plan to manage customer outreach is important to ensure customers are treated equitably. We work with you to set a communication strategy for customers, regulators, investors, and company personnel that outlines the transition plan and status.
During the transition, all impacted business processes and systems will need to be identified. An integrated timeline and resource requirements for internal and vendor systems and process change will need to be developed.
Determining the impact of new tax, accounting and reporting standards will facilitate targeted change and allow you to take full advantage of the relief provided.