The transition from the London Interbank Offer Rate (LIBOR) to a new risk-free rate has revealed a number of challenges for all financial markets participants—the nature and scope of what lies ahead is vast, impacting businesses, operations and support functions. Across global jurisdictions, the financial services industry, working groups, and regulators are focused on efforts to transition to alternative risk-free rates (RFR).
While the efforts to prepare for the transition away from LIBOR will be significant, operational readiness may be most demanding of all. KPMG professionals are guiding numerous firms through the planning and implementation of necessary changes to prepare for new products leveraging alternative risk-free rates and the remediation of legacy contracts referencing LIBOR. The number of operational factors that must be considered grows quickly when links to clients, products, systems and legal departments are entered into the mix. Structural differences between LIBOR and its proposed replacements make operational uncertainty unavoidable. These challenges are further exacerbated by looming unknowns in market conventions, market structure and legal certainty—not to mention the rapidly approaching LIBOR end-date.
We are producing regular content—the Evolving LIBOR series—to help firms easily digest the complex changes transitioning from LIBOR to risk free rates may generate. You can click below to read our thought leadership, technical insight and regulatory round ups of the latest news and views emerging in this period of transition.