25 Jun 2018

IBOR Global Benchmark Transition Report June 2018

AFME, ICMA, ISDA, SIFMA and SIFMA AMG have published a new report that assesses the issues involved with benchmark reform, and makes recommendations on steps firms can take to prepare for the transition from interbank offered rates (IBORs) to alternative risk-free rates (RFRs). 

The report, which was based on a survey of 150 banks, end users, infrastructures and law firms in 24 countries, shows that:

  • There is a gap between high levels of awareness of benchmark reform and concrete steps being taken to transition from the IBORs to alternative RFRs.
  • Several key issues are identified as being important for a successful and orderly transition, including the need for market participants to develop new cash products and liquidity in derivatives and futures referencing the RFRs. Corporate and financial end users believe a forward-looking term structure for the RFRs is necessary.
  • There is an appetite for regular, globally coordinated information from the RFR public-/private-sector working groups, as well as further clarity on the preferred end state for each IBOR.

The transition away from existing IBORs to RFRs is a major capital markets challenge both in respect of new and legacy transactions. AFME and the other trade groups will continue to assist the RFR working groups that are leading the initiative.

Read press release here.