The Riksbank is considering publishing a reference rate

News The Riksbank is considering calculating and publishing one or more so-called overnight rates during 2020. The aim is to better be able to evaluate the implementation of monetary policy. One of the interest rates being developed by the Riksbank on the very shortest maturity could also be used as an alternative reference rate in Swedish krona (SEK). This is made clear in the consultation being sent today by the Riksbank to various stakeholders in order to receive comments on its standpoints. The consultation presents the work being done to develop an alternative reference rate in Sweden and the reasons why the Riksbank is a suitable actor to provide such a reference rate.

Reference rates fulfil a central and important function in the financial system. Among other things, they provide a common benchmark for the pricing of financial contracts. This applies not least to the reference rates known as ‘IBORs’ (Interbank Offered Rates). However, due to events connected to the financial crisis of 2007–2008 and the so-called Libor scandal of 2012, confidence in these reference rates declined. Since then, the frameworks for the reference rates have been reformed and new, alternative, reference rates are being developed all over the world. Work is also ongoing in Sweden to develop an alternative reference rate that can complement the current reference rate Stibor (Stockholm Interbank Offered Rate). This is the work presented in this consultation.

There are several reasons why it is appropriate for the Riksbank to provide a reference rate on the very shortest maturity

First, the Riksbank can contribute to the reliability and quality of the reference rate. Second, it is also a cost-effective solution for society for the Riksbank to carry out this task. In addition, the central banks of several other countries provide the market with various types of reference rates for the shortest maturity.

The Riksbank is now asking for comments on the standpoints in the consultation

The Riksbank is inviting other authorities, financial institutions and other stakeholders to give their views on the arguments and standpoints presented in the consultation.

More information can be found in the Riksbank’s consultation “The Riksbank’s role in providing a reference rate”.

Updated 26/09/2019
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