As Covid-19 dominates the news headlines, SIX announces a key milestone in the replacement of CHF LIBOR by SARON - Banking blog

BLOG LIBOR

Although LIBORs are currently among the most important reference rates in financial markets, their existence is not guaranteed beyond 2021, as previously announced by the FCA (which regulates LIBORs) and confirmed by numerous regulators across the globe. Market participants are therefore defining solutions to smooth the transition away from LIBORs. In particular, alternative reference rates (ARRs) have been defined and new products are being launched.

As part of this transition, we are pleased to report that on 25 March SIX (administrator for SARON, the CHF ARR) announced the launch of SARON compounding indices for 1-, 3- and 6-month time periods. This key achievement will help align market participants and will simplify internal processes. In these times dominated by the Covid-19 pandemic, it is reassuring to see such a positive development!

SARON Compound Indices

Looking beyond our borders, the Federal Reserve Bank of New York (administrator for SOFR, the USD ARR) started publishing similar indices on 2 March this year, and the Bank of England (administrator for the SONIA, the GBP ARR) plans a launch in  July this year, both using comparable approaches.

On 25 March the FCA confirmed the 2021 final transition deadline – despite Covid-19 – but may revisit some of the interim milestones.

Impact coronavirus on LIBOR transition plans

As a final note, we would like to send you and your loved ones our best wishes in these unprecedented times.

For more about the transition process, explore Deloitte’s recently published insights on the journey ahead for IBOR.

Sergio Cruz

Sergio Cruz - Partner, Consulting

Sergio is a Partner at Deloitte’s Operational Transformation banking practice with strong expertise in risk and regulatory driven transformation.
Sergio has over 22 years of experience in financial services with a focus on banking operations, where he worked on several large assignments both in Switzerland and abroad, covering the implementation of regulatory requirements, the definition and implementation of target operating models and the development of front-to-back processes. Examples of areas Sergio covers include IBOR transition, FIDLEG / LSFin, FATCA / AEI, Basel requirements as well as cross-border investigations.

Key clients Sergio has worked with include Swiss global and private banks as well as major UK and US banks.

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Thomas N

Thomas Nicod - Director, Consulting 

Thomas is a Director at Deloitte’s Consulting banking practice with strong expertise in regulatory driven transformation and front line efficiency. Thomas has over 15 years of experience in Financial Services, both as external advisor and within the banking industry, where he was responsible for Credit Suisse’s Bank-to-Bank business in Romandie.

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