Information on the reference rates Stibor and Swestr

Swedish Bankers' Association would like to clarify some facts about, above all, Stibor.

Stibor is the reference interest rate most commonly used in short term financial contracts (SEK). Stibor is commonly used in bonds, loans and in a majority of interest rate and currency derivatives.

Stibor is administered by the Swedish Financial Benchmark Facility (SFBF), a fully owned subsidiary of Svenska Bankföreningen. SFBF is responsible for the ongoing project of adapting Stibor to all requirements and regulations applicable to reference rates and critical benchmarks, primarily through the Benchmark Regulation (BMR), EU legislation (EU) 2016/1011. The ongoing project of adapting Stibor to the Benchmark Regulation is followed by Finansinspektionen, which is the supervisory authority for Stibor.

The Benchmark Regulation stipulates, among other things, that the input data for an interest rate benchmark shall be based and evidenced on transaction data, if available and appropriate. Stibor is based on the banks' financing costs and thus reflects transactions in SEK and in other currencies. The method used to calculate Stibor is currently being further adapted to meet the requirement for transaction data. A public consultation on the revised calculation method for Stibor was published and finalized by SFBF during the spring 2021.

Stibor is recognised as a critical benchmark and must, according to BMR, be operated by an authorized entity. SFBF will therefor submit an official application for authorisation to the Swedish financial supervisory authority, Finansinspektionen, before the end of 2021, in accordance with the requirements of BMR.

Swestr – a new reference rate

The Swedish Riksbank publishes the reference rate Swestr. Swestr was developed based on a recommendation by a market-led working group consisting mainly of banks and administered by the Swedish Bankers' Association.

Swestr is a short term reference rate, needed in the Swedish market.

Swestr constitutes one of the components included in the Swedish Bankers’ Association's recommendation for calculating a so-called fallback rate that can be used for Stibor in financial agreements, in line with the requirements in the Benchmark Regulation and international standards on alternative benchmarks.

It is reasonable to assume that Swestr could be used in markets where Stibor T/N (Tomorrow / Next) is used today. However, a complete transition from Stibor T/N to Swestr may take several years to implement and should only be implemented in a structured and orderly manner in line with how corresponding changes have taken place in other countries.