Consultation response regarding potential candidates for a new risk-free reference rate for the Danish krone market
Danmarks Nationalbank considers it positive that a new reference rate will be based on actual transactions rather than quoted prices, as the underlying transactions will enhance confidence in the reference rate. With the aim of clarification and of strengthening confidence in reference rates in Denmark, the new reference rate should be implemented rapidly, and the existing one should be phased out. It is essential that the sector now continues this work. Solutions still need to be found for reference rates for longer maturities and for migrating existing contracts from old to new reference rates. Such solutions should match international best practice.