The ending of Interbank Offered Rates (IBORs) will likely lead to significant changes across a broad suite of financial products and markets.
IBORs are interest rate benchmarks that underpin over US$350t in financial instruments and contracts globally. The transition away from IBORs to alternative nearly risk-free rates (RFRs) will impact financial institutions and market participants leading to significant client outreach, legal contract renegotiation, repapering and repricing of existing contracts.
Institutions must proactively engage with regulatory and industry-led efforts to analyze the complex challenges ahead and develop solutions to mitigate significant risks to their organizations. All market participants should rapidly begin assessing the cross-functional implications to their specific businesses and clients; and develop robust implementation plans with the aim of reducing their reliance on IBORs prior to 2021.