Reform of interest rate benchmarks

Reference rates, as they are fundamental to many financial contracts, must be robust, reliable and fit for purpose. Each of the benchmark rates subject to reform was based on the rates at which banks lend funds to each other in the interbank market.

As benchmark rates are fundamental to so many financial contracts, they need to be robust, reliable and fit for purpose. Each of these interest rate benchmarks subject to reform were based on the rates at which banks lend to each other in the interbank market. 

Financial regulatory authorities have expressed their concern that because interbank lending transactions have significantly decreased in recent years, the benchmark rates may no longer be representative or reliable. This concern has resulted in recommendations made by the Financial Stability Board towards the global financial industry to reform the major interest rate benchmarks and to develop a new set of alternative benchmarks that are more representative of the current financial environment. 

Publication of all LIBOR rates (USD, GBP, JPY, CHF, EUR) as well as EONIA has ceased. Only a few USD LIBOR tenors are still being published on a non-representative basis for a limited time. ING no longer offers products referencing these rates. 

ING offers a variety of products based on the respective alternative rates available, such as, but not limited to, SOFR, SONIA, TONAR, SARON or €STR. 

European law, in the form of the Benchmarks Regulation, now establishes certain criteria and conditions applicable to reference rates in order to ensure their reliability and robustness. In order to respond to these conditions and the concerns of regulatory authorities around the world, reference rates are subject to reform which will be based on robust methodologies and sufficient and reliable data.

Euribor is compliant with the EU Benchmarks Regulation and can continue to be used. There are no plans to discontinue Euribor. In March 2024, Euribor’s administrator EMMI announced an update to the calculation methodology of Euribor. We understand from EMMI that the change in methodology does not change Euribor’s underlying interest. Euribor will continue to gauge the same economic reality. The updated methodology will be implemented from mid-May 2024 over the course of a six-month period.

The working group on euro risk-free rates has set out its recommended fallbacks for cash products referencing Euribor. These are now available for use for market participants. The working group concluded its work in 2023.

• In Poland, WIBOR will be formally decommissioned on 31 December 2027. As it currently stands, the national working group for benchmark reform has advised that as of 1 July 2024 no new products referencing WIBOR should be offered, instead the replacement WIRON rate should be the used. However, details of the transition, including the choice of replacement rate, are currently under discussion by the working group.
• Likewise, the Canadian CDOR will also decommission as per 1 July 2024, so from that date onwards, all new and existing bookings should reference an applicable CORRA rate as the accepted alternative. In the meantime, ING is proactively ensuring that all new transactions reference CORRA, in preparation for the upcoming end date.

It is expected that some benchmark rates will be reformed or will be discontinued and replaced with alternative benchmark rates which meet the new regulatory and market requirements. This may impact the products and services which are currently made available to you and those we may provide in the future. If, and when, this applies to you, we will duly inform you. The reforms and transition to new interest rate benchmarks is an ongoing process which includes some uncertainties about the transition process, timing and impact.

ING welcomes the move to more robust and reliable benchmark rates. We have been working with regulators, industry bodies and trade associations in order to facilitate a smooth transition. We are closely monitoring developments and will continue to update you throughout the transition.

The Benchmark Regulation mentioned above requires ING to have a robust plan which sets out the actions we will take in case a benchmark rate ceases to exist or materially changes. Each ING legal entity has a Fallback Plan. The Commission de Surveillance du Secteur Financier (CSSF) monitors the Fallback Plan of ING Luxembourg S.A. which can be found here: