Jul 20, 2020

The End of LIBOR Is Getting Dangerously Close: Engage and Succeed with the Numerix LIBOR MasterClass Series

The LIBOR transition to alternative reference rates is entering a critical phase as there is less than two years left until the expected LIBOR cessation deadline. From a risk perspective, the threats are significant for financial institutions that are not prepared for this transition. Organizations potentially face financial, legal, operational and technological risks that could result in material losses, litigation, operational chaos and IT failures.

Given the degree of its complexity, the LIBOR transition is proving to be one of the most significant transformation projects many firms have ever undertaken. But they are not alone in this effort. Support and guidance can be found in the industry’s leading collection of tools, knowledge and expert insights designed to help your institution successfully navigate the LIBOR transition.

Many Firms Lagging

Despite the possible size of the disruption to the capital markets industry and a company’s business, many firms are behind in their transition planning and efforts. According to a recent survey by Debtwire of 100 investment banks, direct lenders, distressed debt investors, hedge funds, and business development companies, 46% of these institutions admit that they are not well prepared for the transition. As many as 39% are not even in the process of marshaling the required resources to address conversion issues, and 42% are not close to a concrete project plan.

Providing Knowledge and Insights to Drive Transition Success

At the risk of being trite, I am going to bring up the popular proverb “knowledge is power,” which is intended to mean that knowledge is a forceful factor that empowers people to achieves great results. We take this to heart at Numerix, which is why we built a LIBOR transition content program—which we call Numerix LIBOR MasterClass—that includes information and insights bespoke to any level of preparedness.

As you consider the state of your LIBOR reform program, you can select the content collections that are most important for you to engage with based on the level of your firm’s transition readiness. Explore from among three categories:

1. Just Getting Started

Your firm is in the early stages of researching and planning for the transition away from LIBOR. Your firm is exploring the potential impact on the business and working to understand the new RFRs.

  • Understand LIBOR’s current status
  • Learn about transition impacts and issues
  • Get up to speed on the current state of Alternative Reference Rates (ARR), including publication timelines

2. Making Progress

Your firm has conducted an assessment of contracts impacted by the switch to ARRs and analyzed elements of market impact. Investment considerations may have been made around infrastructure, technology and data systems to enhance or streamline this process.

  • Take a closer look at the impact on pricing and risk analytics and technology platforms
  • Analyze the market impact of the switch from OIS to SOFR
  • Explore how analytics frameworks can be used to address the transition

3. Prepared

Your firm has a transition plan in place and is working to meet internal deadlines, but is also positioned to adapt to upcoming reform milestones. Additionally, your firm might be exploring ways to optimize elements of the transition.

  • Learn how Python can be used with Numerix analytics to construct ARR curves
  • Learn how you can use Numerix to conduct P&L impact analyses on LIBOR fallback curves
  • Explore the impact of switching to SOFR for swaptions
  • Get a first look at how AI can be applied to the transition

We are committed to help guide your institution through transition success. Simply register for the Numerix LIBOR MasterClass program and gain access to our most sought-after content exploring LIBOR reform.

About the Author

As Chief Marketing Officer and Executive Vice President of Global Marketing & Corporate Communications, Mr. Jockle leads the company’s global marketing and corporate communications efforts, spanning a diverse set of solutions and audiences. He oversees integrated marketing communications to clients 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.

Since joining Numerix in 2008, Mr. Jockle has launched the organization’s award-winning thought leadership program, bringing to light challenges and insights from Numerix market experts. Mr. Jockle also hosts the Numerix Video Blog to tackle the challenges pressing the derivatives markets—from regulatory issues to trading strategies.

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. Prior to Fitch, Mr. Jockle was a member of the communications team at Moody's Investors Service.

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