London, UK. The International Trade & Forfaiting Association (ITFA) and Trade Finance Global Trade (TFG) have today launched the LIBOR transition for trade finance hub.
The change from the London interbank offered rate (LIBOR), the “world’s most important number”, to risk-free rates compounded in arrears as opposed to calculated upfront before the start of an interest period, is one of the most significant legal, commercial, and regulatory change events to hit the financial markets this century.
The purpose of this hub is to provide resources to the trade finance community. LIBOR transition is particularly challenging for trade finance. As we describe later, many trade finance products either require a discount rate or are offered to borrowers who are, for a number of reasons, unable to deal with the challenges posed by the use of a rate calculated in arrears.
This hub is divided into:
1 | Introduction to LIBOR
2 | LIBOR podcast
3 | What is LIBOR?
4| About the transition
5 | Timelines – LIBOR transition
6 | The LIBOR Transition and Trade Finance
7 | Articles – LIBOR
8 | Specific Guidance from ITFA and Resources
9 | Frequently Asked Questions