Danmarks Nationalbank becomes owner and administrator of new Danish reference rate

Authors Danmarks Nationalbank
Subject Press releases from Danmarks Nationalbank
Type Press Releases  
Year 2020
Published 27 November 2020

27 November 2020

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.

Enquiries can be directed to press advisor Ole Mikkelsen on tel. +45 3363 6027.