Danish Financial Supervisory Authority supports Finance Denmark and Danmarks Nationalbank working group on transition from CIBOR to transaction-based reference rates

The Danish Financial Supervisory Authority has endorsed Finance Denmark’s initiative, developed with Danmarks Nationalbank, to establish a working group that will analyse and recommend how Denmark could transition from CIBOR to transaction-based reference rates. The supervisor, which oversees CIBOR, will follow the work as an observer. The working group will include participants from the financial sector and will assess a move away from CIBOR, which is widely used in pricing loans to consumers and corporates and is currently based on daily rate estimates submitted by a bank panel. The authority highlights that transaction-based reference rates are generally more robust and less vulnerable to manipulation, aligning the initiative with the international shift from expert judgement-based benchmarks. Finance Denmark and Danmarks Nationalbank will act as the working group’s secretariat, and the group’s membership and mandate are expected to be published on Danmarks Nationalbank’s website. The supervisor also flags that, given CIBOR’s extensive use, any transition will require solutions that preserve transparency and user protection and deliver a predictable and orderly process.