OPERATIONAL IMPLICATIONS OF DELAYED CESSATION :
A LOOK AT USD LIBOR BEYOND 2021
- Amna Mirza and Spencer Schulten
Published: 11 March 2021
Most LIBOR programs are large, requiring significant budgets and program management resources, cross-regional (US, EMEA, APAC), and cross-functional, impacting Trading, Risk, Strats and Technology teams. Moreover, the operational changes needed for products with one-week and two-month settings expected to meet the Dec 31, 2021 deadline, will also be required for remaining products which have been moved to the December 31, 2021 deadline.
Establishing a successful LIBOR transition program takes several months. Despite the proposed extension, banks maintain the programmatic and staffing infrastructure established around the LIBOR transition and keep moving forward. This paper examines the regulatory changes and exceptions with industry perspective and the impact of the extended LIBOR cessation timeline.