LIBOR No More — How a legal and financial language translator can help you

The London Interbank Offered Rate (better known as LIBOR) has been the number one benchmark for setting short-term interest rates for over 40 years. But as of December 31, 2021, it no longer has a hold on the financial world.

As financial institutions struggle to adapt to this massive change, legal translation services are in high demand. A legal and financial language translator can ensure that foreign language documents meet these new standards.

Why is LIBOR ending?

LIBOR is an outdated method of calculating interest for global markets. He found himself on the chopping block because he failed to keep up with these markets as they grew in size and complexity.

There is also the problem that LIBOR has been at the center of several scandals, not the least of which was its role in the 2008 recession.

As a result, global authorities announced the end of LIBOR for new commercial contracts in 2020, signaling its retirement in 2022 with many warnings.

What is LIBOR Replacement?

No document will replace LIBOR, making this transition period difficult for financial and legal institutions globally.

Instead, several heirs arrived.

What does this mean for financial and legal documents?

The alphabet soup above illustrates how complicated this transition has been and will continue to be.

It is not simply a question of replacing one method with another, but of integrating a patchwork of several different options depending on the location of the business transaction. Lawyers and financial advisors will need to take geography into account to ensure that they update documents that refer to LIBOR appropriately.

Language also plays a huge role in this transition. Not only will foreign language interest rate measurements require expert translations, but individual contracts may need to be translated to reflect the new guidelines.

Why do you need a legal and financial language translator

Translating in-house is a waste of time for your resources which puts pressure on your bilingual partners – if you have any at all.

The few partners who speak more than one language may not have the skills required to produce legal translations that meet the latest regulatory requirements. More likely, most of your lawyers will only speak one language.

A legal and financial translator, on the other hand, is a qualified professional who provides expert translations in these sectors. You can find such a professional through a certified legal translation agency.

The best legal translation companies have a large team of translators, each with different specializations and languages. They can match you with the right professional for the job, regardless of location or language.

As an experienced translator in legal and financial languages, this expert produces flawless translations, free from numerical errors.

The essential

The death of LIBOR triggered some of the biggest changes in financial spheres in recent memory. A lot of work will go into changing contracts and drafting new financial documents.

Any mistakes on translation errors could result in the loss of billions of dollars in business. To avoid these costly mistakes, make sure your legal and financial language translator is from a reputable agency.

This article does not necessarily reflect the views of the editors or management of EconoTimes