The challenge

The front office of a large Canadian Bank wanted to understand its exposure to LIBOR to identify any risks associated with the cessation of LIBOR and subsequently define a remediation strategy.

The LIBOR Transition Program was considered by the bank to have significant impact on the legal work streams due to the volume and complexity of contracts that required remediation. The agreement types were made up of ISDAs, CSAs, Confirmations and Loan Agreements. The client was looking for an appropriate technology solution to facilitate their contract assessments, which could handle any type of documentation without jurisdictional constraints. In addition they were interested in a solution with review and storage functionality, that was queryable across multiple dimensions, that could be used beyond the LIBOR Transition Program e.g., by client / region / contract type.

Our response

Across a 3 month period Likezero provided a solution to the bank which enabled them to;

1_ Understand the impact: We loaded all the banks’ documents into the software and built them a searchable contracts inventory which enabled our client to understand relationships across products, documents and entities.
2_ Analyse the impact: We analysed the legal language within the contracts inventory to identify the impacted scope to define a remediation strategy for the bank.
3_ Take decisive action: We held status of the remediation strategy of each in scope document in the software. This real time oversight enabled our client to govern their remedial actions and track the document through to resolution, enhancing traceability and auditability.

Business outcomes

• Saved critical time and cost: We reduced the impacted scope by 50%.

• Improved and accelerated regulatory compliance: Produced a regulatory aligned project plan that defined the remediation strategy.

• Expedited remediation decision making: Provided the bank with a view of all contractual exposures to LIBOR categorised by the remediation pathway (e.g., which require re-papering, which contained good enough fallbacks etc).

• Enhanced auditability: Full traceability of the impact analysis back to the original document or amendment.

• Golden source data base: Provided a valuable database of all their asset agreements and associated data sets, for use beyond LIBOR improving responding to the next legal crisis.

Technical outcomes

• Effective digitisation of complex tables.

• Handled multiple entities and amendments.

• Output report of the mined data to be ingested by various downstream systems.

• Processed and managed intra-document complexities such as linking definitions and references.

• Produced a structured data output report that was ingested by multiple downstream systems.

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