Finastra expands Fusion LIBOR transition calculator
LONDON, November 24, 2021 / PRNewswire / – Finastra has added additional Alternative Reference Rates (ARRs) and Risk Free Rates (RFRs) to its Fusion LIBOR transition calculator. The move allows banks, businesses and borrowers to calculate ARR in anticipation of the end of the majority of LIBOR rates on December 31, 2021. In addition to SOFR for the US dollar and SONIA for the pound sterling, the calculation service now includes the ARR â¬ STR rates for the euro, TONAR for the Japanese yen and RFR SORA rate for the Singapore dollar.
âAs the LIBOR transition matures, we see a range of new risk-free rates emerging in the market. This will add complexity and additional costs to the operations of many organizations, âsaid Simon thorogood, Senior Principal Product Manager, Corporate and Syndicated Lending at Finastra. âBanks and corporate borrowers need to be fully prepared. They need to ask themselves: are they ready to research and calculate the new risk-free rates? Can they reconcile the rates published by different authorities at different times? the complex calculation methods that have an impact on regularizations? Finastra’s Fusion LIBOR transition calculator is quick to deploy and can help banks and businesses overcome all of these challenges and validate what is sent to them. “
With LIBOR discontinuing at the end of the year for most currencies and durations, the Fusion LIBOR Transition Calculator service will help banks and corporate borrowers manage a seamless transition to the new rates. The calculator uses a reliable methodology, based on accepted ARR market conventions, to deliver consistent and accurate results, helping users significantly reduce operational risk and ensure regulatory compliance.
Available through Finastra’s open innovation platform FusionFabric.cloud, the calculator service can be seamlessly integrated into a bank’s existing lending systems. Using open APIs also facilitates integration with legacy systems that have not been prepared for the LIBOR transition and are unable to perform complex ARR calculations. The new calculated ARR rates can be directly consumed by these legacy applications, avoiding the need for complex and costly system modifications.
âMinimizing the risk associated with the transition from LIBOR to new risk-free rates is absolutely essential and any technology that can help simplify what could otherwise be a very complex process will be highly welcomed by the industry,â the industry said. . Patricia hines, Head of Corporate Banking, Celent.
The Fusion LIBOR Transition Calculator is a market leader, providing comprehensive ARR and RFR coverage. It is accessible to all banks and businesses. Finastra is an established leader in bringing ARR functionality to accounting and loan management. Fusion Loan IQ offers compound arrears calculations and configurable parameters specifically for ARRs. The solution also supports conventions recommended by ARRC, BoE, LSTA, and LMA, including enhanced user-friendliness and efficiency features that include upcoming matrix functionality for credit spread.
Finastra is building an open platform that accelerates collaboration and innovation in financial services, creating better experiences for people, businesses and communities. Backed by the largest and most comprehensive portfolio of financial services software, Finastra delivers this vitally important technology to financial institutions of all sizes around the world, including 90 of the world’s 100 largest banks. Our open architecture approach brings together many partners and innovators. Together, we show how applications are written, deployed and used in financial services to evolve with changing customer needs. Learn more at finastra.com
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