埃森哲-2019年伦敦同业拆借利率调查报告（英文）-2019.10-18页_4mb

LIBOR Transition Summary

Core Content

The LIBOR Transition is a significant challenge for the financial services industry, driven by the impending discontinuation of the London Interbank Offered Rate (LIBOR) by the end of 2021. This transition is not just a regulatory change but a fundamental shift in how financial contracts are benchmarked, with potential impacts on risk management, product offerings, and client relationships.

Main Findings

• Overall Preparedness:
  Despite 84% of firms having a formal LIBOR transition plan, only 18% describe their programs as "mature." This indicates a lack of comprehensive and integrated planning across the industry.

• Regulatory Uncertainty:
  Many firms are uncertain about the regulatory expectations and the timeline for the transition. 47% of respondents are not confident in understanding regulatory requirements across jurisdictions, and 21% have had no contact with regulators regarding the transition.

• Lack of Funding and Resources:
  Only 45% of respondents feel they have allocated sufficient funding for the transition. Furthermore, 53% lack the necessary talent or capabilities to complete the transition by 2021, and 47% claim insufficient funding.

• Strategic Priorities:
  There is a conflict in strategic focus, with some firms allocating funds to product design (23%) and others to risk models (17%) and technology (14%). This shows a lack of clarity on where to prioritize resources.

• Industry Roles:
  The industry is divided into "drivers" (investment banks and capital markets participants) and "passengers" (corporate and asset management clients). Drivers are more proactive and have better engagement with regulators, while passengers often wait for the industry to "solve the problem."

• Risk and Financial Implications:
  Firms that underestimate the transition's complexity may face financial consequences such as capital and liquidity issues, increased costs, and reputational risks. The transition could also lead to operational disruptions and basis risk due to the shift from LIBOR to alternative reference rates (RFRs).

• Regulatory Stance:
  Regulators, including the FCA and the Federal Reserve, have emphasized that the 2021 deadline is firm and that firms should not expect delays. The FCA has warned that the assumption of LIBOR continuing after 2021 is not justified.

Key Challenges

• Regulatory Uncertainty:
  The lack of clarity from regulators is a major barrier to effective planning and execution.

• Operational and Technological Complexity:
  Transitioning to RFRs requires significant changes in technology, operations, and risk management. Many firms have not yet begun detailed planning or implementation.

• Legal and Risk Management Readiness:
  Only 15% of firms feel their legal teams are ready for the contract remediation and restructuring required, and only 14% believe their risk management teams have a detailed understanding of the transition's impact.

• Client and Market Impact:
  The transition could lead to P&L implications for clients, and firms may need to invest in client outreach to manage these impacts effectively.

Recommendations

To manage the transition effectively, firms are encouraged to:

• Develop a Baseline Scenario:
  Assess financials, risk, contracts, and infrastructure to understand the implications of the transition.

• Mobilize a Transition Program:
  Appoint dedicated staff, senior sponsors, and program leads to ensure accountability and progress.

• Conduct an Impact Assessment:
  Identify and quantify the risks and changes across all business lines and technology functions.

• Create a Transition Strategy:
  Align the strategy with regulatory timelines and develop a front-to-back product and technology plan.

• Establish Governance and Accountability:
  Define clear governance models and stakeholder roles to facilitate decision-making and oversight.

• Plan and Budget:
  Develop detailed budgets and communication strategies to support the transition and client engagement.

• Implement Risk Management Plans:
  Mitigate exposure to operational, liquidity, and basis risks throughout the transition.

• Develop New Product and Portfolio Strategies:
  Align product offerings with the new RFRs to capture value and reduce risk.

• Engage with Regulators:
  Increase communication with regulatory bodies to stay informed and aligned with evolving expectations.

• Invest in Technology and Data Management:
  Digitize contracts, extract data, and analyze fallbacks to create a central contract database and support the transition.

• Prepare for Long-Term Impacts:
  Recognize that the transition may have lasting effects beyond 2021, with some firms expecting costs to continue into 2022 and 2023.

Conclusion

The transition from LIBOR is a complex and high-stakes process that requires integrated, mature, and well-funded strategies. Financial firms must move beyond the belief that regulators will delay the transition and instead focus on proactive planning, stakeholder engagement, and resource allocation to ensure a smooth and effective move to RFRs. The shift presents both challenges and opportunities, and firms that fail to prepare may face significant financial and reputational risks.