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:
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.
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.
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.
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.