Managing the Transition From LIBOR to ARR

Because it’s deeply embedded in institutions’ financial ecosystems, the transition from London Inter-Bank Offered Rate (LIBOR) impacts a broad set of financial products and market segments. Consequently, financial organizations must identify and quantity their LIBOR exposures.

Institutions must measure the size of the activity and the number of counterparties and consumers holding financial contracts referencing LIBOR across all products valued as Secured Overnight Financing Rate (SOFR)-based products. However, failure to seamlessly transition existing LIBOR contracts to SOFR or an appropriate Alternative Reference Rate (ARR) can expose organizations to operational difficulty, risks and non-compliance.