Financial exposure and risk assessment: Each firm should accurately measure its financial exposures to LIBOR and report them to senior management. Large firms should measure their exposures frequently—for example, quarterly—identifying exposures by product, counterparty, and business line and identifying the proportion of exposures that will run off before the relevant LIBOR tenor ceases. 3.
Operational preparedness: Each firm should identify any internal and vendor-provided systems and models that use LIBOR as an input and make necessary adjustments to provide for their smooth operation ahead of LIBOR’s cessation. 4.