Planning and preparing a move toward alternative reference rates
For a number of years now, regulators, central banks, and the industry alike have been exploring how they can enhance existing interbank offered rate benchmarks. This has been accelerated recently by comments from regulators regarding LIBOR's longevity and the establishment of potential risk free-rate replacements.
The Bank of Canada has acknowledged that benchmarks contribute to the efficient functioning of markets and the stability of the system. It's important to get this right, and, to this end, they have established the Canadian Alternative Reference Rate Working Group.
Canadian Dollar reference rates are not the only consideration for local institutions, cross-border trade is a significant part of the economy, and, in most cases, the underlying transaction will be linked to one of the above rates that may well be transitioning out. As a result, the impact of change to these reference rates are significant for a range of organizations and time potentially limited. This paper provides an overview of why we need to make this change, who it will impact, and highlights the key actions required now for a successful transition.
We're pleased to discuss how moving toward alternative reference rates will impact your organization, or any other business issue with you.
Let's do this.