Transaction-based reference rate


Danmarks Nationalbank will undertake ownership and become administrator of the new Danish reference rate, DESTR, scheduled to be launched in the beginning of 2022 following a test period in 2021. Similar reference rates are managed by central banks in other countries.

Reference rates are used in a wide range of financial contracts - including bank loans, mortgage bonds and interest-rate swaps. Thus, it is important for Danmarks Nationalbank and the financial system in Denmark that a short-term transaction-based reference rate is introduced in Danish kroner in line with international standards.

DESTR is based on overnight borrowing transactions, which Danmarks Nationalbank will collect from a broad group of banks as part of a new statistic for 1-day money market rates. The new statistic is set to be expanded to a broader range of money market rates and foreign exchange transactions in coming years.

Furthermore, Danmarks Nationalbank will establish a working group with participation from the banking sector that will prepare a proposal for the transition from and discontinuation of the existing short-term reference rate, Tom/Next rate.

This site will be updated as more information becomes available. 


Facts

In June 2019 the working group under Finance Denmark published their final recommendation on a new transaction-based reference rate, Denmark Short-Term Rate (DESTR). 
The recommendation was based on a consultation regarding a new risk-free transaction-based reference rate in Danish kroner. 
Link to the consultation and final recommendation can be found in below section. 

Danmarks Nationalbank has collected data and calculated the new reference rate since august 2019 on a monthly basis on behalf of Finance Denmark.
Excel-sheet with data can be found below. 

Danmarks Nationalbank is working on increasing the number of reporting banks. On the basis of newly reported data for 2017-2020 from the reporting banks DESTR will be recalculated for the whole period. Data will be published as soon as it has been reviewed and analysed. 

It is still expected that a test-phase is launched with daily reporting and calculation of DESTR in the second half of 2021.