LIBOR Transition: Preventing History From Repeating Itself

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Screenshot of the first page of LIBOR Transition Preventing History From Repeating Itself
Carol Beaumier, Protiviti Senior Managing Director, and Bernadine Reese, Protiviti Managing Director

The London Interbank Offer Rate, or LIBOR, which according to the New York Times is the ‘‘one number that arguably matters more than any other’’ in the world of finance, will no longer be the primary benchmark rate used by the financial services industry as of year-end 2021. For the last 35 years, firms across the financial services industry have used LIBOR as the interest rate benchmark to price or value bonds, securitizations, derivatives and a wide variety of loans.

This article takes a closer look at the financial services industry’s preparedness to replace LIBOR with suitable alternative rates and provides a framework finance firms can use that covers three stages of LIBOR transition.

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