Reform of interest rate benchmarks

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Certain interest rate benchmarks including LIBOR and EONIA will be discontinued and replaced with alternative benchmark rates which meet new regulatory and market requirements, whereas EURIBOR has been reformed and will remain for the foreseeable future. If any of your financial products or internal processes refer to these rates or other interest rate benchmarks, the following information is relevant for you.

What are interest rate benchmarks?

Interest rate benchmarks are used to determine (1) the amount of interest payable or receivable for a wide range of financial products such as derivatives, bonds, loans, structured products and mortgages, and (2) the valuation of financial products.

The most common examples of interest rate benchmarks used in financial contracts across the world are the London Interbank Offered Rate (LIBOR) and for the Euro, the Euro Interbank Offered Rate (EURIBOR) and Euro Overnight Index Average (EONIA).

Why are interest rate benchmarks being reformed or replaced?

As benchmark rates are fundamental to so many financial contracts, they need to be robust, reliable and fit for purpose. Financial markets have changed significantly since the global financial crisis.

One key development is that banks no longer fund themselves to the same extent in the interbank market. This has resulted in recommendations by the Financial Stability Board for the global financial industry to reform the major interest rate benchmarks and to develop a set of alternative rates that are more representative of the current financial environment. European law, in the form of the Benchmark Regulation, sets out certain criteria and conditions for benchmark rates to ensure that they are reliable and robust.

What is about to change?

The process of reforming EURIBOR was successfully completed in 2019 and is expected to remain in place for the foreseeable future. The successor rate for EONIA, the Euro Short-term Rate (‘€STR’), is now available and market participants are midway through the transition process.

Most LIBOR rates will cease to be available at the end of 2021, with an 18-month extended period of publication of USD LIBOR until the end of June 2023 to support the transitioning of legacy products.

What does this mean for you?

For a long time, regulators have made clear that some benchmark rates will be discontinued and replaced with alternative benchmark rates which meet the new regulatory and market requirements. This may impact the products and services currently made available to you and those that we may provide in the future. Also, existing products may need to be transitioned to accommodate a switch to alternative benchmark rates. We will inform you if and in what timeframe this applies to you.

We encourage you to familiarise yourself with the reform of interest rate benchmarks. We provide several links below and frequently asked questions, which will give you an overview of the main interest rate benchmarks that are subject to the transition.

You may want to engage independent consultants for e.g. legal, tax and accounting advice to review the contractual terms governing your exposures that mature beyond 2021 and assess the robustness of any fallback language. You may also want to consider the potential impact of the IBOR discontinuation 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 we are 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 various transitions.

It is important for ING and our clients to ensure the continuity of IBOR linked contracts. Depending on your location, you will be informed about your IBOR linked products that require updating.

Fallback Plan

The 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 monitors the Fallback Plan of ING Bank N.V. which can be found here:

Benchmark regulation – Robust written plan - ING Bank N.V. (PDF 0,1 MB)


We will continue to update you one this topic via our frequently asked questions and refer you the various websites below for more information. The information on this site is not intended to be a complete or an exhaustive overview.

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