Stockholm Interbank Offered Rate (STIBOR)

What Is the Stockholm Interbank Offered Rate?

Stockholm Interbank Offered Rate (STIBOR) is the benchmark interest rate that banks in Sweden charge each other for overnight and other short-term loans.

STIBOR is the average of rates at which Swedish banks will loan to each other. It covers six maturities: overnight, multi week, one month, two months, 90 days, and six months.

The Swedish Financial Benchmark Facility has been responsible for the calculation and administration of STIBOR since April 20, 2020. It took over from the Swedish Bankers' Association.

Grasping STIBOR

STIBOR serves a function like the London Interbank Offered Rate (LIBOR) in the United Kingdom and United States. It is a reference rate that shows an average of interest rates that banks active in the Swedish money market will loan to one another without collateral at various maturities.

Seven panel banks submit rates to compute the reference rate. They are: Danske Bank, Nordea Bank, SEB, Handelsbanken, Swedbank, L\u00e4nsf\u00f6rs\u00e4kringar Bank, and SBAB Bank.

Under current strategies, on the off chance that each of the seven panel banks submit rates, the highest and most minimal rates are set to the side. The middle five rates are then used to compute the rate for the important maturity.

An oversight committee is responsible for the methodology, determination and dispersal of STIBOR. The committee's purpose is to guarantee that STIBOR benchmarks are reliable and accurate.

STIBOR has an informant system to report any inconsistencies. However efforts will be made to keep the characters of informants confidential, as examinations start off, unveiling an individual's identity might be vital. Anonymous revelations are not supported, as agents will most likely be unable to prove claims without authenticating evidence.

The integrity of benchmark rates has been a concern since the 2012 LIBOR scandal. In March 2021, the Swedish Financial Benchmark Facility announced the public meeting phase of its audit to carry more transparency to STIBOR and adjust the benchmark to international standards.

Features

• Seven panel banks submit rates, which are then used to ascertain the reference rate.
• STIBOR is a reference rate that shows the average of rates at which Swedish banks will loan to each other without collateral.
• The Swedish Financial Benchmark Facility is responsible for the calculation and administration of STIBOR.
• In March 2021, the Swedish Financial Benchmark Facility sent off the public discussion phase of its audit to carry more transparency to STIBOR.