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Evolving LIBOR: Planning the transition to new Risk Free Rates

Evolving LIBOR: Transition planning

How will your firm fare in the transition to new global risk-free rates? KPMG’s Evolving LIBOR report outlines the implications for firms and provides insight into scenario planning for a successful transition.


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Almost a year after the Financial Conduct Authority’s (FCA) Chief Executive Andrew Bailey announced that the FCA would no longer compel banks to submit data to the London Interbank Offered Rate (LIBOR) after 2021, there is now a clear global direction of travel towards alternative risk free rate benchmarks (RFRs) based on transactional data.

Firms must take action now to plan for this very significant structural shift. However with so many of the details of the transition remaining uncertain, including timing and jurisdictional differences, firms will require a flexible cross-functional programme to adapt to changes in the global landscape.

In this report we outline 3 potential scenario planning options.

Scenario 1 – The big bang
Scenario 2 – Proactive market adoption
Scenario 3 – A steady multi-year transition

© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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