Libor transition: Between a rock and a hard place
Banks are caught in the middle of regulatory pressure from above and corporate inertia from below when it comes to transitioning away from Libor, but they are the lynchpin on which the whole process depends.
As if they didn’t have enough to deal with, banks are faced with a succession of serious challenges over the next two years as they face up to the reality of the end of Libor.
Firstly, they must figure out their exact exposure to the expiring benchmark with every client that they have – an eye watering task – and establish how to manage the situation. Secondly, they have to figure out how best to approach new lending based on new benchmarks.