A global reform on interest reference rates (interbank offered rates – IBORs) is underway as the existing IBORs are no longer seen as liquid or robust enough to represent the interbank market. IBORs are used as reference rates for various types of financial products and contracts, such as credit facilities, mortgages, derivatives, cross-currency swaps, bonds and other investment products, estimated to be worth at least EUR 350 trillion.

Authorities around the world are now requiring improvements: either by strengthening the methodology behind existing IBORs or by creating new alternative reference rates (ARRs) to replace the existing ones. The EU Benchmark Regulation sets out criteria for a reference rate to be compliant and requirements for fallback plans in case the reference rate becomes unavailable in future.

Please note that all information about the IBOR transition is based on the current understanding Nordea has and that this might change in future.

Current Assumptions by Currency


These rates are expected to cease to exist by the end of 2021 and should be replaced by alternative reference rates (ARRs) no later than this date. The ARRs are currently available and in use as overnight rates. It remains uncertain whether forward-looking term rates (like the 3-month USD LIBOR) will be available for all currencies, although this is expected for most currencies. However, even if forward-looking term rates are provided, backward-looking term rates will likely be the standard for most or all currencies.


Will cease to exist by the end of 2021 and will be replaced by the euro short-term rate (€STR). The transition has already started.


The hybrid EURIBOR was authorised under the EU Benchmark Regulation (BMR) in November 2019. €STR as a fallback.


It is expected that the three Nordic IBORs will continue to be available for the foreseeable future. CIBOR (and other Danish benchmark rates) was approved at the end of 2019 and NIBOR approval is expected by May 2020 at the latest. The expectation is that the administrator of STIBOR will apply for authorisation in 2020.

The use of the new ARRs will, at least initially, be primarily as fallback rates.


Questions and Answers

What is IBOR?

Interbank offered rates (IBORs) are interest rates at which panel banks offer to lend to another panel banks. IBORs are for example EURIBOR (EUR), LIBOR (GBP, USD, CHF, EUR, JPY, AUD), STIBOR (SEK), CIBOR (DKK) and NIBOR (NOK).

What is IBOR transition?

The IBOR transition is a global reform with significant impact on the financial industry. Current expectations are that some IBORs will be replaced by new alternative reference rates (ARRs), while others may continue to exist but with a reformed methodology, see the table on the previous page.

Why a reference rate reform?

For various reasons, the interbank market has become less liquid since the financial crisis, especially in tenors longer than overnight. The rates are therefore no longer considered representative of an actual interbank market.

How does Nordea handle the transition?

All Nordea’s business areas are preparing for the transition, to ensure a timely and compliant transition to relevant ARRs where needed. The reform process is ongoing and at different stages for different currencies. Discussions among market participants are continuing, and further clarity of the market approach is expected. Nordea is actively following these discussions and participates in many of the working groups. Nordea will inform, support and guide customers in order to make the transition as smooth as possible.

How does this affect customers?

The transition to new reference rates will have an impact on Nordea’s current and future product offerings. During 2020-21 there will be changes in our product offerings, especially for customers with existing agreements referencing LIBOR or EONIA rates, but also to the extent requested with new product offerings referencing the new alternative rates. Nordea will contact customers in due time regarding these changes, and customers can also decide to contact Nordea to discuss the implications of the transition and any appropriate actions.


Contact Nordea

The final outcome of the global reform is still in progress, and assumptions may change. Please contact your Nordea representative for any further questions.

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