Read on for an introduction from Taran Khera, Head of Asia Sales, Bloomberg L.P. and explore the report contents.
> Planning for the future of benchmarks - with or without LIBOR Bloomberg Professional Services > Emerging challenges in IBOR benchmark reform Bloomberg Professional Services > SOFR impact in Asia Bloomberg Professional Services > LIBOR alternatives in a post-scandal world Bloomberg Professional Services > LIBOR clock is ticking for financial firms, central bankers warn Bloomberg Professional Services > Meeting the needs for LIBOR transition Bloomberg Professional Services
The London Inter-bank Offered Rate (LIBOR) is the benchmark for $370 trillion in financial instruments around the world — an estimated 80% of derivatives positions. And by 2021, it may be dissolved.
Since the 2008 financial crisis, the standard has been under scrutiny for its vulnerability to manipulation, and reforming it has become one of the most significant issues in global finance. But the path is a challenging one. Market players must prepare themselves for difficulties including operational hurdles, poor market liquidity for IBOR alternatives, risk of market fragmentation, and the responsibility of providing transparency around their fallback provisions.
Preparation itself is complex, with lengthy timelines and interdependencies obscuring the full ramifications of a transition away from LIBOR. While the U.S. Federal Reserve has put forward the Secured Overnight Financing Rate (SOFR) as a USD LIBOR replacement, process diverges significantly between such large, developed
markets and small, regional ones, which must reconcile these international changes with their own local reform efforts.
As well as cultivating market awareness and enhancing systems to support the transition, paramount in navigating benchmark transition are robust data modeling, dynamic currency scenarios, and back-testing data for outcomes to manage risk. For reliable forecasting, stakeholders need solutions that offer the data and tools to seamlessly power analytics across multiple markets and asset classes.
As a calculating agent for IBOR fallbacks in the 2006 ISDA Definitions, Bloomberg is committed to supporting global markets throughout the LIBOR transition — driving education and collaboration, and delivering an ever-expanding universe of data, analytics and solutions. This report provides insight on the most important issues around planning for and operating effectively in a post-LIBOR world.
Best wishes, Taran Khera, Head of Asia Sales, Bloomberg