As the end of Libor draws closer, banks are making plans to upgrade their vendor-provided risk management systems to be able to handle backward-looking rates. But overhauling creaky loan systems is no simple task, as firms are discovering.
“There is a significant amount of lead time to get your lending systems up and ready,” says a senior source at a US investment bank. “It’s not as simple as just building a new curve as it is on the derivatives side. It’s a lot more complicated than that.”