LIBOR and reference rate reform

The clock is ticking toward December 2021 and the end of LIBOR – will you be ready?

A tremendous shift across financial markets is taking place. The London Interbank Offered Rate (LIBOR) is being replaced. Currently the benchmark for over US$350 trillion in financial contracts worldwide, the impact of the transition from LIBOR will be far-reaching for financial services firms, businesses and customers alike. Given the scope of the impact, planning for this transition must start now and begin with a comprehensive strategy.

Key impacted businesses and functions include capital markets, commercial lending, retail banking and wealth management, investment management, insurance, market infrastructure and corporate treasury.

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How PwC can help

The transition from LIBOR is primarily driven by the market and not regulators, and institutions and territories are preparing at different rates. PwC’s LIBOR and reference rate reform specialists in territories throughout the globe can help you assess, prepare for and execute on the transition. We work with you across the entire lifecycle of the transition, including:

  • programme mobilisation and governance
  • impact assessment and transition planning
  • contract management and remediation
  • client & customer outreach and communications
  • systems and process changes
  • risk and valuation model changes
  • managing related tax and accounting implications

Explore our solutions

Mobilise your team

PwC can help you create a LIBOR transition programme that works for where you are now. We can develop and implement a tailored governance structure that can help you manage your programme across your business units and the geographies where you operate.

Analyse your exposure

PwC can help you analyse your company’s direct and indirect exposure to the LIBOR transition. We conduct assessments across your operations to help you understand where remediation might be needed with your products, functions and systems.

Define the strategy

PwC can help you evaluate how your products may need to change once markets are no longer tethered to LIBOR. We assist you in evaluating the economic implications for your new offerings and the downstream effects of any changes you might make.

Update your contracts

PwC can help you address vulnerable contracts, including fallback provisions, on your terms. We can work with you to identify LIBOR-linked contracts and extract the relevant data, analyse those contracts for risks and create a remediation plan to support your negotiations with customers and counterparties.

Educate your stakeholders

PwC can help you create an outreach plan for clients, counterparties, vendors and regulators. We can support you as you share how your company is adapting to the changes and monitor if the message is getting through.

Prepare your systems

PwC can help you identify and manage the updates you’ll need to process ARR trades across internal and external systems. We can help you update front- and back-office systems, treasury and ALM systems, vendor solutions and supporting business processes.

Adjust your models

PwC can help you change your risk and valuation models to reflect the effects of the new ARR(s). We can work with you to construct curves, address changes to central clearing counterparty (CCP) discounting, incorporate historical data sets, adjust risk capital calculations and validate the updated models.

Adapt your accounting and tax programmes

PwC can help you understand how the change will affect your accounting and tax programmes across the relevant standards. We can help you adapt to the post-LIBOR environment, reflecting hedge accounting rules and managing tax impacts on funds transfer pricing.

Get in touch with us

https://pages.pwc.ch/core-contact-page?form_id=7014I0000006qXrQAI&lang=en&embed=true

 

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Contact us

Tina Balzli

Tina Balzli

Partner, Head Banking, Legal, PwC Switzerland

Tel: +41 58 792 15 54

Patrick Akiki

Patrick Akiki

Partner, FS Management Consulting Lead, PwC Switzerland

Tel: +41 58 792 25 19

Philipp Rosenauer

Philipp Rosenauer

Head Regulatory Implementation Services, Legal, PwC Switzerland

Tel: +41 58 792 18 56