Should the structured products industry congratulate itself on successfully transitioning its sterling Libor obligations, or bite its nails in fear of unintended consequences? Perhaps both.
While sterling Libor is for most banks much smaller than US dollar Libor trade flow, it is still a huge book. So it has taken an equally huge, industry-wide effort for front office and back to grapple with its complex matrix of tasks – ensuring economic equivalence and seeking legal routes to transitioning legacy products, standardising reference rate treatment throughout the layers of a product, and drafting in the new floating rate terms from Isda’s 2021 definitions. Despite tigh
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