top of page

Has your bank began transitioning away from LIBOR?

The London Interbank Offered Rate (LIBOR) is a reference rate, and over time since the 1980s has become the dominant rate for most adjustable-rate financial products. 

International investigations into LIBOR that began in 2012 revealed widespread efforts to manipulate the rate for profit and resulted in billions of dollars in fines for involved banks globally and jail time for some traders. More importantly, the scandal challenged the validity of LIBOR and therefore regulators globally have signaled that financial firms should transition away from the LIBOR by the end of 2021.

The future of LIBOR is uncertain. It is unclear whether or not LIBOR will be permanently discontinued or whether LIBOR, in some other form will continue post-2021. However, it is clear that transitioning away from LIBOR will affect any firm that relies on models that reference LIBOR in any way. 

ECON|Analysis, LLC specializes in the development and validation of quantitative and qualitative models across the financial services sector and have supported a wide range of U.S. banks in the development and re-development of a wide range of models. 

Our models are highly customized to our clients' individual positions but they are all unique based on extensive historical data, reasonable forecasts, and defensible scenarios to estimate lifetime credit losses for all portfolios.

bottom of page