"2000 Zero-Zero Party Over Oops Out of Time. So Tonight I'm Gonna Party Like It's 1999." -Prince
For many of us, those words and that song might have been the last we heard on New Year’s Eve in 1999, almost two decades after its initial release. And it seemed like it was the end of a long saga for financial institutions. Despite all the “Y2K” noise leading up to 1999, there was a push at the very end that added a lot of stress.
“LIBOR cessation” seems like the new “Y2K.” While Prince gave us a 20-year head start on 1999, the regulatory community has also given us fair warning that the cessation could have a number of consequences that, if not prepared, could be problematic if dealt with at the last minute. In extending the end of the cessation timeline from the end of this year to June 2023 (along with some strong words), it seems clear they are unhappy with the progress made to date and expect better responses when they ask “So what have you done?”
How prepared is your bank or credit union? The answer should be broken into two responses, in my opinion.
The first is related to how day one impacts your balance sheet and operations in June of 2023.