Benchmark rates are changing and this is having a massive impact on financial markets and market participants around the world.

Concerns about benchmark rates have been swirling for years. Even before the London Interbank Offered Rate (LIBOR) scandal hit in 2012, unsecured wholesale borrowing activity had been in decline, and, as the LIBOR scandal made immensely clear, the potential for manipulation was high.

According to the Financial Stability Board, there were more than US$370 trillion worth of notional contracts that were tied to LIBOR, EURIBOR or TIBOR in 2014. And that number has grown since then. In recent times, it has become increasingly clear that there is high demand for a benchmark replacement favouring risk-free rate (RFR) based on transactional data. Central banks have encouraged industry working groups to form to help solve issues arising from establishing and then transitioning to a new more trustworthy benchmark rate.

Due to increasing concern about the future sustainability of LIBOR benchmarks, and uncertainty about the legal position of such contracts if LIBOR became unavailable, the Financial Conduct Authority (FCA) and contributor banks have worked to secure voluntary panel bank support to sustain LIBOR until the end of 2021. It is possible that, ultimately, a number of different benchmark formats will coexist, fulfilling a variety of purposes and market
needs.

Authorities in the United States (US) and the United Kingdom (UK), the European Central Bank, the Swiss National Bank and the Bank of Japan have been working jointly with market participants on a successful market-led transition away from GBP LIBOR to alternative (RFRs). However, there is still significant uncertainty about how the transition to RFRs will pan out. With little clarity on the plan for transitioning away from the established Interbank Offered Rates (IBORs), many financial services organisations are struggling to both manage the risks and efficiently develop their transition strategy.

The Storm-7 Consulting (L)IBOR Migration and RFRs Training Course has been designed to break down the operational impact of the replacement of IBORs, with particular focus on the significance that this will have on banks, asset managers, insurers and their respective clients that issue, sell and manage IBOR benchmarked products. Attendees will be guided through best practices for assessing the risks and impacts to these products and formulating a strategy to remediate.

The expert trainer will break down the challenges that will be faced by market participants, affecting business, operations, technology, contracts and fall-back clauses in financial products that reference IBOR, delta between old IBOR and new RFR, new term rates, repapering and compliance.

Ultimately, this training course becomes a fundamental requirement for all market participants that wish to deal with the challenges ahead and accelerate the delivery of change.