IBOR reform

The reform of benchmark interest rates (IBOR reform) used for loan pricing in the global financial system is a very interesting and current financial topic. After 2021, most interbank interest rates are no longer published and have been replaced by alternative overnight almost risk-free benchmark rates. The IBOR reform affects existing and new contracts that are indexed to one of those interbank interest rates to which the reform applies.

Our last project was aimed at assessing the impacts of the IBOR reform on loan agreements that were tied to variants of LIBOR interest rates. The output was a workshop on the transition from the respective LIBOR exchange rates to the new alternative rates. The transition process requires the consideration of several aspects and, based on these aspects, it is necessary to adjust individual processes, systems, loan agreements, financial reporting, etc.

After the workshop, the client was able to assess the impacts of the IBOR reform on its entire loan agreement portfolio and consider the essential steps to be taken in connection with the transition to new alternative interest rates.