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How To Manage LIBOR Transition Risks

LIBOR for decades was the world’s most widely used benchmark for short-term rates. But the transition now occurs amid a global pandemic, which increases market uncertainty and requires more risk managers, strategists and investors to work through distributed teams. These professionals need more effective and efficient mechanisms to identify actionable insights. Technology platforms -- like BCMstrategy, Inc.’s PolicyScope Platform -- can help navigate through the noise of the news cycle and access insights that can generate competitive advantages.

Maintain Objectivity -- Find facts, not opinions

In sifting through the news, people are bombarded with subjective viewpoints embedded within policy analysis. Increased access to media only complicates the analytical process, making it difficult to distinguish between opinion and cold, hard facts. Before making strategic decisions and spending millions on new processes. risk managers and strategists need to be able to see quickly, clearly, and in real-time what policymakers are actually saying and doing regarding the LIBOR transition.

Daily Momentum Measurements -- Increased efficiency

The COVID-19 pandemic has not slowed the LIBOR transition. In fact, dwindling liquidity in some LIBOR products intensifies policymaker commitment regarding the transition to national, market-based benchmarks. Automated daily monitoring enables businesses to receive relevant, targeted insight regarding new developments. Faster access to insights means executives can address issues proactively to mitigate risk and find alpha generation opportunities, rather than acting reactively.

Data on Demand -- Enhanced strategic insights

Analytical time series functions enable strategists to spot inflection points and identify relationships across policymakers globally. By tracking the evolution of a specific term over time, our time series enable strategists and risk managers to see details others have missed and to generate strategic insights that deliver competitive advantages relative to other market participants.

In using these three methods, individuals and businesses can strategically and quickly address a broader range of LIBOR transition challenges. Platforms such as PolicyScope provide objective, real time information that enables people to quickly cut through the noise and find the needles in the haystack.

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BCMstrategy, Inc. is an early stage technology company bringing the data revolution to policy intelligence by quantifying global public policy activity daily. Daily analysis of platform data is available to individual subscribers through the PolicyScope Risk Monitor. Subscribe today today to receive data-driven insights regarding key geoeconomic policy trends. Please contact us for more information regarding enterprise-level deployments for teams and direct data delivery via API.

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