Evaluation of the impact of the remplacement of the Libor rate to Sofr.

Abstract

Abstract

The transition from the Libor rate (London Interbank Offered Rate) to the Sorf rate (Secured Overnight Financing Rate) in dollar transactions is a significant change in global markets. The Sofr rate has been proposed as a more robust alternative based on real transactions, as it reflects interest rates in financial markets backed by guarantees from the US Treasury Department.

There are also impacts in the commercial and financial sphere, which are mitigated to a certain extent by clients who use these interest or reference rates and by the financial institutions and banks that offer them the different products within systems and currencies. in US dollars and that the mentioned products have commercial effects on placement on the market due to said substitution or conversion.

In addition, it is necessary to take into account the effects, changes and adjustments that, from a contractual perspective, affect existing and enforceable legal instruments or contracts that relate to the Libor rate. The evaluation should also include the adjustment of risk and financial management systems and practices, as well as the impact on the commercial positioning of products that include an offer to customers and companies at the dollar rate.

Through a qualitative and quantitative study, and through non-experimental, correlational documentary research; It will be possible to analyze the variables that are the subject of the study and be able to determine and evaluate the established impacts.

The replacement of the Libor rate with the Sofr rate is a complex and far-reaching process that requires careful planning, as well as an evaluation to determine the impact that the financial industry is suffering and will suffer.

Keywords: Banks, Financial, Impact, Libor, Sofr, Substitution.