As banks prepare for the forthcoming cessation of Libor, the OCC today released an updated self-assessment tool for banks to evaluate their preparedness for transitioning away from Libor to an alternate reference rate, such as the Secured Overnight Financing Rate. The updated tool replaces one issued in February.
The tool can be used to determine the appropriateness of a bank’s transition plan and assess bank management’s execution of the transition plan, as well as oversight and reporting. The OCC noted that Libor transition plans should be risk-based and may not need to include all points included in the self-assessment. The agency added that banks should be working toward resolving replacement rate issues while communicating with affected customers and third parties.