The impact on RMB clients

We are contributing to the industry dialogue with regulators, central banks and industry bodies, aiming to achieve continuity for benchmark-based products, continued financial market resilience and good outcomes for our clients.

The transition from LIBOR and some other IBORs is expected to impact existing and future transactions across contract types and client segments. Adopting new ARRs impacts a range of transactions and products, and clients could expect to be affected if they have a floating rate loan or credit facility, deposit or derivative that has or may have payments linked to LIBOR or other affected legacy benchmarks that mature after 2021. This may include corporate loans and derivatives trading. The ARRs differ economically to LIBOR and differ by currency too – this has been considered as we continuously enhance our product offering.

We  have assess impacted LIBOR-linked transactions and products, reviewed and enhanced our product offering. We have closely monitored market developments during this process and benchmarked against our global peers as part of our journey towards reference rate reform.

The IBOR transition is a continuing journey that is evolving as financial markets work towards and achieve consensus on how to treat existing products.

Product changes

It is important to note that with the phasing out of LIBOR, some products may not be available with an alternative benchmark and could be discontinued or phased out. We continue to work towards product offerings that are relevant for our clients’ current needs. Our LIBOR programme team has:

• Quantified the exposure to LIBOR, reference rate, product class and tenor to inform our transition strategy (classification of relevance, prioritisation, and client impact)
• Implemented strategies for the management of new ARR market data, rates and curves supplied to both calculation engines and front-end systems
• Assessed the potential risk because of the changes in terms of tax, legal, operational, accounting, liquidity and accounting and implemented all changes required.

What clients can do

We continue to encourage our clients to undertake a similar analysis and review exercise and to seek appropriate independent professional advice (legal, tax, accounting, financial or other) so that they can understand the impact of the discontinuation of any LIBOR on their portfolios with RMB and their business more generally.

Please see links to more Information on the LIBOR cessation.

RMB published articles:

• Libor Transition: A World of Worry 

More information about LIBOR

These websites contain and publish additional information and updates:

• Loan Markets Association
• ISDA
• The Association of Corporate Treasurers
• Alternative Reference Rates Committee (ARRC)
• International Accounting Standards Board (Board)