The End of LIBOR: Implications and Preparing for 2021

In July the FCA secured the final nail on LIBOR ’s coffin as it announced it would phase out the measure after the end of 2021. The much-berated global borrowing benchmark, which became synonymous with industry scandals over the last decade, is still widely used – underpinning more than $400 trillion in financial transactions. Though four years could, in theory, seem like a generous timeline to shift from the LIBOR to its replacements, the pervasiveness of LIBOR has serious and complex repercussions from curve building approaches to technology and the impact of the shift on a vast number of existing contracts held by institutions and market participants.

On November 16th Liang Wu, Vice President of Financial Engineering and Head of CrossAsset Product Management at Numerix, explored how LIBOR met its timely end and how market participants should prepare for the 2021 decommission of the prominent benchmark. He discussed the alternative rates and mechanisms that will take its place, examined the impacts of the decision on legacy contracts, and highlighted important factors to consider as institutions plan and execute the upcoming changes.

MR. Wu's addressed the following:

  • LIBOR's past and present
    • LIBOR scandal & reform
    • Liquidity of the interbank unsecured market
  • Termination of LIBOR by the end of 2021
    • Alternative reference rates
    • Impact on legacy contracts
    • Fallback rates and mechanism
  • Implications for curve construction
  • Preparing for market change
  • Key takeaways

Featured Speaker:

Liang Wu, Vice President of Financial Engineering and Head of CrossAsset Product Management at NumerixLiang Wu, Vice President of Financial Engineering and Head of CrossAsset Product Management at Numerix
Liang Wu is a VP of Financial Engineering and heads up CrossAsset Product Management at Numerix. Wu has previously served as Director of Financial Engineering in the Client Solution Group at Numerix. Before joining Numerix in 2015, he worked at CME Group and HSBC in Pricing and Valuation, and Model Review roles. He holds an MSc degree in Financial Engineering from Columbia University, an MSc degree in Space Physics from Rice University and a BSc degree in Geophysics from University of Science and Technology of China.

JamesJockleModerator: James Jockle,Chief Marketing Officer, Numerix
Mr. Jockle leads the company's global marketing efforts, spanning a diverse set of solutions and audiences. He oversees integrated marketing communications to customers in the largest global financial markets and to the Numerix partner network through the company's branding, electronic marketing, research, events, public relations, advertising and relationship marketing.

Prior to joining Numerix, he served as Managing Director of Global Marketing and Communications for Fitch Ratings. During his tenure at Fitch, Mr. Jockle built the firm’s public relations program, oversaw investor relations and led marketing and communications plans for several acquisitions. He also oversaw the brand development of a new company dedicated to the enhancement of credit derivative and structured-credit ratings, products and services. Prior to Fitch, Mr. Jockle was a member of the communications team at Moody's Investors Service.

 

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