“Banks need to revise contracts maturing beyond 2021 to incorporate fallback provisions, terms in case LIBOR is unavailable, or to transition to an alternative reference rate.
The volume of contracts to review is breathtaking”
The days of LIBOR (London Interbank Offered Rate) are numbered, but the reference interest rate is embedded in millions of financial contracts worldwide.
Artificial intelligence (AI) can help banks mitigate the financial and legal risk associated with contracts maturing beyond 2021, writes Anu Sachdeva, Global Service Line Leader, Commercial Banking, Genpact.
It’s now just T-minus two years until the financial services industry says goodbye to LIBOR.
And, while LIBOR is calculated for five different currencies, the value of contracts referencing US dollar LIBOR alone is estimated at $200 trillion.