The global financial industry is undertaking a significant transformation with the phasing out of London interbank offered rate (LIBOR) and transition to alternative reference rates.
ADB is supporting borrowers through the LIBOR transition. A disorderly LIBOR transition would present systemic risks and idiosyncratic risks for market participants and could have negative implications for borrowers. ADB has been preparing since 2018 to support borrowers towards an orderly LIBOR transition and to safeguard its financial soundness.
The impact of COVID-19. The phasing out of LIBOR has not been delayed by COVID-19. Global financial regulators have reconfirmed market participants need to be prepared to transition away from LIBOR by the end of 2021.