Working group on alternative reference rates (ARR)

About the working group

Reference rates play a critical role in the global financial system. Large values are linked to these interest rates through various financial products and financial contracts. In response to revelations of attempts to manipulate global reference rates and a decline in activity in the unsecured interbank market following the financial crisis, the G20, under the auspices of the Financial Stability Board (FSB), launched an initiative to reform interest rate benchmarks.

In response to the FSB's recommendations and the work in other countries in this area, Norges Bank has decided, after consultation with the financial industry, to establish a working group on alternative reference rates for the Norwegian krone. The working group comprises representatives of Norwegian banks and foreign branches with good insight into the relevant Norwegian markets and the use of Norwegian reference rates. The first part of the working group's work will consist of putting forward proposals on possible alternative reference rates and identifying the conditions that must be in place for a successful transition to the alternative reference rate(s). Subsequently, the working group will work on how such a rate can be implemented as a reference rate.

Any questions can be addressed to the secretariat by e-mail ARR@norges-bank.no

Recommendation for an alternative reference rate in NOK

The ARR working group recommends a reformed version of Nowa as an alternative reference rate for the Norwegian krone. The rate will be very similar to today’s Nowa, but will be reformed when Norges Bank becomes the administrator for Nowa as from 1 January 2020.