A far-reaching ecosystem challenge that impacts nearly every aspect of large financial institutions across people, processes, and technology:
LIBOR Transition
LIBOR and other Inter-bank Offered Rates (IBORs) came into widespread use in the 1970s and are meant to reflect the costs of unsecured inter-bank borrowing. Over the last 50 years IBORs have become intertwined in banking products and underpin >$350 Trillion of financial products, touching everything from contracts/legal, technology/systems, communications, models, risk, audit, data, finance, compliance, accounting/tax, and more. Following the financial crisis, manipulation and increasingly illiquid markets underlying the LIBOR benchmark rate led regulators to launch a global initiative to transition away from LIBOR. Through the FSB, the FRB, CFTC, BOE, and ECB began compelling market participants to begin cessation with a target completion by YE 2021.
Our Delivery
Eclipse mobilized teams to handle various cessation activities for a global banking organization:
- Established program governance for the LIBOR Transition Office and federated teams across business units, including top-down program sponsorship
- Established central PMO communication and reporting/monitoring cadences
- Conduct initial impact assessments and transition planning exercises
- Internal stakeholder identification and engagement
- Established working groups as needed for information sharing, decision making, and execution planning (e.g. product aligned groups as well as horizontal enterprise functions)
- Developed inventories of products and contracts linked to IBORs and quantified exposures
- Segmented exposures for legacy and new business with consideration for materiality and roll off
- Assessed fallback provisions and triggering by product and contract type
- Determine repapering requirements / contract amendments as well as tactical vs. strategic efforts (e.g. contract digitization, machine learning for smart tagging, etc.)
- Evaluated operational exposures across people, processes, and technology
- Designed a holistic client communication plan
- Assessed needs for system/infrastructure and process changes
- Built detailed program execution plans
Our Value
Eclipse was able to ramp up teams across various disparate groups to seamlessly stand-up the change management functions and workstreams for the LIBOR Transition.
Eclipse partnered closely with client stakeholders to mobilize a balanced team of consultants and full-time resources to deliver the program.
Eclipse helped produce a clear road map and plan for the next stage of the program and the continuous improvement needed to stay abreast of evolving industry consensus as we approach full cessation by 01/01/2022.
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