30th of June this year marks the conclusion of the transition from The London Interbank Offered Rate (LIBOR) to Risk-Free Reference Rates.
Corporate treasuries and finance departments have had their hands full addressing the far-reaching impact of the LIBOR transition. It was already a complex and time-consuming task to stay on top of hundreds of complex multicurrency loans. Adjusting to the new reality of Risk-Free Reference Rates (SOFR etc.) can seem like an unsurmountable mountain.
But even with all the hardships that comes with adjusting to a new reality, it is important to keep in mind that phasing out LIBOR is the only right move. The recent rate-fixing scandals left legislators and regulators little choice to ensure a credible benchmark rate for the global financial system.
So even though change is always hard, there is a more transparent and risk-free reward waiting on the other side. Also, considering that we are in 2023, you can make use of digital technology to make the transition painless, and the continuous management of loan portfolios a whole lot more accurate and efficient. This can make or break your business’ survival.
