While financial services firms are “largely on track” for a successful transition away from Libor, half of them are still facing challenges related to systems and operations readiness, according to a new survey from Bloomberg. Thirty-six percent of respondents said repapering of existing transactions and agreements continues to be a challenge and 45% said they face difficulty around choosing new alternative rates and conventions. The survey of 130 executives from global financial services firms also found that 15% said that customer outreach and negotiation remained a challenge.
Firms are still working on how to handle non-centrally cleared derivatives, with 28% indicating that they were “not sure” how to address these derivatives before the cessation date and 13% responding that they are still formulating a transition strategy.
The transition is well underway, the survey found, with 51% of firms no longer trading U.S. dollar Libor-indexed products, including floating-rate notes, cross-currency swaps and eurodollar futures.