07/06/2013 – Finance Norway wants Oslo Børs to be in charge of the calculation of the Norwegian Interbank Offered Rate, NIBOR. Oslo Børs will also undertake the supervision of the filing of interest rates from the banks that constitute the base for the calculation of the interbank rate. Through this new scheme, Oslo Børs will provide a recognised and neutral framework for determining the NIBOR.
The Norwegian Interbank Offered Rate is important in the Norwegian capital market in general and in the Norwegian bond market in particular. After concerns have been raised regarding manipulation of such rates in other countries, Finance Norway has assessed whether the system of determining the Norwegian interbank rates should be changed.
Finance Norway and Oslo Børs will now initiate a process to establish a formal agreement with Oslo Børs as calculation agent for NIBOR and the supervision of the reference rates.
– NIBOR is one of the capital market’s most important tools, and we see it as a vote of confidence that Finance Norway wishes to enter into an agreement with Oslo Børs as an independent third party for the calculation of the NIBOR. Confidence in these interest rates both nationally and internationally is very important for a well-functioning capital market and fixed income market in Norway, says CEO and president of Oslo Børs, Mrs. Bente A. Landsnes.
Oslo Børs will use their existing infrastructure and systems for the filing, calculation, distribution and especially surveillance of the interbank rates. This means that the six banks participating in the NIBOR panel will file their interest rates in the Oslo Børs trading system, which will carry out the calculation of the average rate base on the current NIBOR regulations, as established by Finance Norway. Oslo Børs will through its market surveillance system implement real-time monitoring of the interest rate determination.
The NIBOR will be distributed in the same way as other quotes and index information from Oslo Børs and will be available to the public free of charge with a 15 minute delay on the Oslo Børs website. For market participants who require NIBOR in real-time, the quotes will be distributed in the same way as other real-time information from Oslo Børs.
NIBOR (Norwegian Interbank Offered Rate) is a collective term for Norwegian money market rates with ten different maturities, ranging from one week to one year. NIBOR is calculated as an average of what the six major banks in the Norwegian market, the so-called panel banks, indicate that they will require in interest on unsecured loans to other banks. Interest rates are indicative and not based on actual trades.
NIBOR with 3-month maturity is widely used as a reference rate in the professional market. This applies to both loans and deposits and derivatives. NIBOR is also used in contracts between private parties.