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Enabling a holistic solution to London Interbank Offer Rate repapering

Author

Listed:
  • Cohen, Marcy Sharon

    (General Counsel and Managing Director, ING Financial Holdings Corp., USA)

  • Schell, Christopher S.

    (Partner, Davis Polk & Wardwell LLP, USA)

  • Gummaregula, Sirisha

    (Chief Operating Officer, QuisLex Inc., USA)

  • Pugh, Jason

    (Managing Director, D2 Legal Technology, UK)

Abstract

This paper examines the discontinuation of the interbank offered rates (IBOR) and explores how a holistic approach that utilises the right resources and processes for each step of preparing for the discontinuation can have a significant impact. At the end of 2021, IBOR is being discontinued (with the exception of certain US tenors that will discontinue in 2023), and with it will come a slew of changes in financial markets. Because of the discontinuation of IBOR and the necessary repapering process, there are a number of associated challenges that can arise, including matters related to compliance, data consistency and organisational alignment. This paper discusses the challenges associated with IBOR repapering as well as the issues that can and will arise from not being proactive in preparing for IBOR reform. Additionally, this paper discusses what goes into developing an effective workflow before it is enacted. Further, this paper takes a broader view on what the best practices look like for each step of the repapering process, including review, analysis, execution and engagement, as well as what an end-to-end repapering process will look like in 2021. As institutions prepare for the changes on the horizon, a smooth end-to-end repapering process is crucial as the financial markets brace for the discontinuation of IBOR, and it is important to look for ways to drive efficiencies, such as the utilisation of artificial intelligence (AI) technologies. For all parties impacted by the discontinuation of IBOR, this paper provides a detailed look on how to be prepared and what an efficient and effective preparation should look like from start to finish.

Suggested Citation

  • Cohen, Marcy Sharon & Schell, Christopher S. & Gummaregula, Sirisha & Pugh, Jason, 2021. "Enabling a holistic solution to London Interbank Offer Rate repapering," Journal of Financial Compliance, Henry Stewart Publications, vol. 5(1), pages 30-44, June.
    • Handle: RePEc:aza:jfc000:y:2021:v:5:i:1:p:30-44
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    More about this item

    Keywords

    IBOR; repapering; interbank offered rate; compliance; discontinuation; LIBOR; transition; ARRC; ISDA protocol;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K2 - Law and Economics - - Regulation and Business Law

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