Thousands Needed by Banks 

Loans potentially being affected because of their indexing to LIBOR

With an estimated $350 trillion loans potentially being affected because of their indexing to LIBOR, the concern is the high number of contracts which need to be rewritten and accepted by all parties involved.

Momenta Group, the London-based contingent resourcing firm has to date been asked to specify between 8 – 10,000 skilled individuals at financial institutions across the UK, USA and Asia. These institutions vary from high street banks through to wealth and asset managers, and a small number of hedge funds.

Kevin Riches, board director at Momenta, commented: “To implement this gargantuan change globally, without a backlash, will require an enormous amount of human resourcing. The mechanics of implementation and rewriting documents will require specific skilled workforce which few financial institutions have at the ready, not least with the looming deadline for contract swaps.

“The scale of the problem for financial institutions is threefold in that they will need to employ all measures to avoid penalties by swapping contracts by deadline, secondly, avoiding a consumer backlash on the fairness of new rates given, and finally, having enough skilled staff – often with paralegal skills – to handle the vast amount of contract changeovers.  The minimum amount of time a contract can be swapped on a simple agreement is an hour, and our concern is that there will be a huge shortfall of skilled individuals to manage this impending problem.  LIBOR affects a far great number of credit agreements than many realise, not least from student loans to pensions, mortgages to credit card agreements.

“Wealth and asset managers who work on hurdle rates, equally, will have a tough time as their commissions become jeopardised.”

Momenta has specified thousands of skilled individuals to help financial institutions over the past 30 years, most notably staffing banks with skilled individuals to manage PPI remediation.

Based in the UK with offices in Australia, India and the USA, Momenta provides contingent workforce in sectors ranging from retail financial services, technology, legal, and training and development.

 

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