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New Article Provides a Risk Manager’s Guide to Reference Rate Transition

Tuesday, April 16, 2019   (0 Comments)
Posted by: Amanda Averch
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With the future of Libor uncertain beyond 2021, many banks are beginning to assess how they will transition to an alternative reference rate. The latest free article on the ABA Risk and Compliance website examines this transition from a risk management perspective and offers several proactive steps banks can take to prepare.


Among other things, banks should assess the extent to which their current and legacy contracts reference Libor, and what the fallback language allows, writes Wolters Kluwer’s Chris Heine. Institutions should also consider whether to amend their legacy contracts, and select a new index—such as the Secured Overnight Financing Rate, or SOFR—for both their future and legacy contracts. Read the article.

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