Notice of changes to interest rate benchmarks
Some interest rate benchmarks have been or will be discontinued or reformed. Those that will discontinue will or have been replaced with alternative benchmark rates that meet regulatory and market requirements. If any of your financial products or internal processes refer to these rates, the following information is relevant for you.
What has changed?
LIBOR and EONIA
- Publication of all LIBOR rates (USD, GBP, JPY, CHF, EUR) as well as EONIA has ceased. 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.
Euribor
- Euribor is compliant with the EU Benchmarks Regulation and can continue to be used. There are no plans to discontinue Euribor. In 2024, Euribor’s administrator EMMI updated the calculation methodology of Euribor. We understand from EMMI that the change in methodology did not change Euribor’s underlying interest. Euribor continues to gauge the same economic reality.
- 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 2
Local benchmark transitions
- Canadian CDOR was officially discontinued as of 1 July 2024, and ING’s impacted business lines and locations have ensured that the relevant Term and Overnight CORRA rates can be offered instead.
What's still to change?
Local benchmark transitions
- WIBOR: Since the October 2023 announcement of the postponement of the deadline for WIBOR cessation (to end of 2027 ), the Polish National Working Group for Benchmark Reform (NWG) started work on an updated transition roadmap. In Q1 2024, a new composition of the SteerCo for the NWG for WIBOR reform emerged, after a new Polish government took office in 2023. It was decided to engage in a round of public consultations in which three potential successors to the WIBOR were recommended. The outcome of the subsequent NWG review was that the target rate will be either WIRF or WIRF+. WIRF is based on unsecured deposits by major domestic credit institutions, while WIRF+ additionally includes deposits from public institutions. A second-round public consultation is in progress to choose between two WIRF options. We expect formal guidance from the NWG SteerCo on the updated roadmap. Until that time, we will continue to offer WIBOR for new transactions.
- Mexican TIIE: By the end of 2024 we also expect the Mexican TIIE 28d rate to be updated to reflect the move to the overnight TIIE Funding Rate (F-TIIE). However, this switch is viewed as a calculation change, rather than a rate decommissioning and replacement, and therefore no repapering of existing contracts is required.
What does this mean for you?
The discontinuation and replacement of a rate with an alternative benchmark may impact the products and services made available to you and those that we may provide in the future. Existing products using such rates may also need to be transitioned to accommodate the switch to an alternative benchmark.
We encourage you to familiarise yourself with the developments outlined above. Some links to relevant sources of information are provided below.
When impacted by a benchmark transition, you may want to engage independent consultants for example for legal, tax and accounting advice to review the contractual terms governing any exposures that mature beyond the respective cessation date including an assessment of the robustness of any fallback language. You may also need to consider the potential impact on your business from an accounting, tax and regulatory perspective as well as the impact on treasury and risk management systems and processes.
How is ING responding to this?
ING welcomes the move to more robust and reliable benchmark rates, and continues to work with regulators, industry bodies and trade associations to facilitate a smooth transition. We will continue to update you throughout the various transitions and timelines.
Fallback plan
The EU Benchmark Regulation mentioned above requires ING to have a robust plan that 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 Dutch Authority for Financial Markets (AFM) monitors the Fallback Plan of ING Bank N.V.
Here's a high level summary: Benchmark regulation – Robust written plan - ING Bank N.V. (PDF 0,1 MB)
Questions?
We refer to the various websites above for more information. The information on this site is not intended to be a complete or an exhaustive overview. If you have questions specific to your business with ING, please approach your contact at ING.
Related links