It’s the $370 trillion question: how to transition the financial markets from interbank offered rates (IBORs) to alternative (nearly) risk-free rates (RFRs) across virtually all asset classes, including derivatives, bonds, loans and other financial instruments. It is clear that the transition is going to be challenging and much thought is needed on having a transition plan that will require collaboration between front-office, law, risk management and infrastructure and other functional areas.
This report covers the basics and provides an overview of IBORs, the reasons for transition from IBORs to RFRs and concludes with an overview of the challenges the market is facing in the transition.