What is Next? SWOT analysis of current Libor Transition and assessment of the implementation of the fallbacks

Abstract

Used globally, Libor is very widely referenced in derivatives, loan and securitization documentation, floating rate notes (FRN ) and in a range of users lending instruments, such as mortgages and student loans (BoE, 2019). According to The Working Group on Sterling-Risk Free Reference Rate, since mid 2017€ the attention for the well-functioning of financial markets has increased and it has increased the need€ to accomplish the “transition away from Libor and to include more robust fallbacks in contracts referencing” (The Working Group on Sterling Risk-Free Reference Rates, Bank of England, Dec 2019) for contracts that will expire beyond 2021, which is the end-date stated by the FCA for the use of the benchmark