IBOR transition services

EY helps global institutions prepare for the imminent transition away from Interbank Offered Rates (IBORs) to Alternate Reference Rates (ARRs). We also play a leading role in supporting regulators, trade associations and others to increase awareness and education.

What EY can do for you

An IBOR transition is a significant multiyear transformation initiative for most global financial and nonfinancial institutions with exposure to IBOR-linked products and instruments, contracts, process, models and systems.

We have extensive experience in assisting institutions in the mobilization and execution of IBOR transition initiatives across all major currencies. We also assisted ISDA and other industry trade associations in developing the IBOR Global Benchmark Transition Report 2018 based on a global survey of financial market participants.

The global cross-functional EY teams operate across the five major regions, including the Americas, the United Kingdom, Europe, Switzerland and Asia-Pacific (Singapore, Hong Kong, Tokyo and Australia). We have aligned resources with product knowledge across derivatives, floating rate notes, structured products, and corporate and consumer loans. In addition, EY teams comprise subject matter resources across legal, finance, accounting, tax, treasury, risk management, and technology. EY teams seamlessly operate, with access to industry-leading professionals who understand the complexities of your industry.

We regularly host industry roundtables and conferences on this topic in major financial centers around the world, and publish thought leadership and newsletters to inform market participants on the latest developments.

EY teams have developed a broad suite of service offerings, tools and accelerators to help our clients manage this complex transition. Our service offerings are tailored based on the size, complexity, product mix, and specific requirements of each institution.

The broad EY service offerings include:

    • Impact assessment (leveraging EY tools)
    • Finance resource and risk profile assessment
    • Mapping internal and external dependencies
    • Multiyear transition road map for each:
      • Line of business
      • Enterprise function
      • Currency
    • Transition scenarios, assumptions and risk
    • Business case for IBOR transition (business value)
    • Communication strategies for:
      • Investors (debt and equity)
      • Rating agencies
      • Regulators
      • Industry working groups
      • Clients and counterparties
      • Third-party vendors
    • Internal communication portal (e.g., FAQs)
    • Client communication portal
    • Board and senior management updates
    • Accelerated new product approval (NPA)
    • Product pricing strategy and guiding principles
    • Define new product rollout and existing product transition strategy based on internal and external dependencies
    • Inventory of contracts
    • Risk assessment and prioritization
    • Client outreach strategy (linked to product transition)
    • EY digitization tools for contract management
    • New, or amendment to, contract language
    • End-to-end client repapering workflow management
    • Model inventory and impact assessment
    • Risk-free rate discount curve construction
    • Historical time series for alternate RFRs
    • Model redevelopment, validation and documentation
    • Risk infrastructure upgrades
    • Catalog of impacted data sources and applications
    • Engagement model with third-party application providers
    • Application change prioritization (based on product and client transition strategy)
    • Definition of functional and nonfunctional requirements
    • Support for internal and external system changes
    • Front-to-back system integration testing (EY tools)
    • Inventory of processes, and impact assessment
    • Fair value measurement and hedge accounting
    • Tax implications of revaluation of assets and liabilities
    • Amendments to accounting and finance policies
    • Financial and risk disclosures