Transitioning from the London Interbank Offered Rate to the risk-free rate alternatives such as SONIA and SOFR was at one time a recommendation but is becoming a requirement, as the FCA’s LIBOR support will cease at the end of 2021. Transitions spell challenge, and this is true of the bond market as it faces LIBOR’s demise. What are some potential solutions that bond issuers should consider, especially for legacy bonds?
London Inter-bank Offered Rate (LIBOR)
Artificial intelligence has become a must-have for banks today. AI in the form of robotic process automation and machine learning is going a long way to help banks become more efficient in customer service, more compliant in adhering to regulations and more capable in tackling fraud. But like all good things, it comes with a few strings. What are the responsibilities for senior individuals and boards attached to the many benefits AI brings to banking?
The death knell for the global benchmark interest rate LIBOR has rung, and the impact of its demise will be widely felt. The time to prepare for the switch to alternative risk-free rates has arrived; the back book will need to be transitioned, and products based on the new rates will need to be launched. What are the three main risks during this period, and what is the major opportunity?