IBOR transition

Interbank Offered Rates (IBORs) has historically been the most commonly used benchmarks for interest rates. They are referenced in financial products such as derivatives, bonds, loans, structured products and mortgages and form the basis on which interest payments under those products are calculated.

The unsecured interbank market has become less liquid since the financial crisis and IBORs are no longer seen as robust. Authorities around the world require improvements by strengthening the methodology behind existing IBORs or by creating new alternative reference rates (ARRs) / risk-free rates (RFRs) to replace the existing ones. The EU Benchmark Regulation (BMR), which came into effect in January 2018, seeks to address the concerns in relation to accuracy and integrity of benchmarks as well as requirements for fallback provisions in case the reference rate would become unavailable in future.

LIBORs (London Interbank Offered Rates) are the IBORs that are to cease to be published. The Nordic IBORs continue, but there is no guarantee that they will stay forever.

SEB has actively followed market development and practice in the IBOR transition

Disclaimer

This page has been compiled by SEB Large Corporates & Financial Institutions, a division within Skandinaviska Enskilda Banken AB (publ) (“SEB”) to provide background information only.

Opinions, projections and estimates contained in this report represent the author’s present opinion and are subject to change without notice. Although information contained in this report has been compiled in good faith from sources believed to be reliable, no representation or warranty, expressed or implied, is made with respect to its correctness, completeness or accuracy of the contents, and the information is not to be relied upon as authoritative. To the extent permitted by law, SEB accepts no liability whatsoever for any direct or consequential loss arising from use of this page or its contents. The analysis and valuations, projections and forecasts contained in this report are based on a number of assumptions and estimates and are subject to contingencies and uncertainties; different assumptions could result in materially different results. The inclusion of any such valuations, projections and forecasts should not be regarded as a representation or warranty by or on behalf of the SEB Group or any person or entity within the SEB Group that such valuations, projections and forecasts or their underlying assumptions and estimates will be met or realised.