IVSC valuation guide on IBOR reform

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17 Feb, 2021

The International Valuation Standards Council (IVSC) has published a perspectives paper 'IBOR Reform - A Valuation Guide' as the move away from IBOR will change the pricing, valuation, and risk management practices, notably in the financial services sector but also for any entity that uses financial instruments.

The paper notes that the industry will need to navigate valuation challenges that are interrelated and can be grouped under three broad headings:

  • valuation impact of terms in existing IBOR inventory;
  • valuation impacts of evolving market liquidity;
  • valuation impacts of new risks.

The paper also outlines the areas that can contribute to ‘valuation uncertainty’ and thereby increase valuation risk in valuations of financial instruments arising from the cessation of IBOR.

Please click to access the perspectives paper on the IVSC website.

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