LIBOR TRANSITION

LIBOR and the subsequent transition are expected to be one of the biggest challenges faced by the financial services industry. To put things in perspective we are effectively talking about the discontinuation of a rate that is the baseline for trillion worth of financial transactions. The impacts are going to be huge and if not handled properly can jeopardise the already fragile world economy and banking system which is reeling under the pressure of #COVID -19.

The good news is that the regulators worldwide are working on ensuring that the transition is as smooth as possible. The responsibility also lies on the financial services industry to implement processes for continuous monitoring of LIBOR exposure. They also need to develop a strategy to reduce the reliance on #LIBOR for a new business to lessen the quantum of contracts that go beyond #2021.

The most critical bit in this to have proper communication channels to educate customers on his transitions and how it might impact them. Training and educating the staff is also critical to make this process as smooth as possible. 

Source: Eibfs research desk: Read more: https://research.eibfs.ae/wp-content/uploads/LIBOR-transition.pdf