About DESTR – the Danish reference rate

DESTR (Denmark Short-Term Rate) is the preferred overnight reference rate in Danish kroner. Danmarks Nationalbank is the owner and administrator of DESTR and calculates it on all Danish banking days based on the specific transactions made in the Danish krone market the previous banking day. Reference rates are used in a wide range of financial contracts, including bank loans, mortgage bonds and interest rate swaps. DESTR is calculated in accordance with international standards.

Calculation and data

DESTR is an interest rate intended to reflect unsecured overnight wholesale deposit costs in Danish kroner for banks active in the Danish krone market. DESTR is calculated using unsecured overnight fixed-rate deposit transactions.

Transaction dataset

The transaction dataset used to calculate DESTR is collected via reports submitted by the following banks as part of the statistics for unsecured short-term money market transactions:

  • Arbejdernes Landsbank
  • Danske Bank
  • Jyske Bank
  • Nordea Bank
  • Nykredit Bank
  • SEB
  • Sparekassen Kronjylland
  • Spar Nord Bank
  • Sydbank

Handelsbanken reported data until 1 December 2022, but ceased reporting in connection with Jyske Bank’s acquisition of Handelsbanken Danmark.

Transactions carried out with counterparties in the following sector codes (ESA 2010 standards) are included in the DESTR calculation:

  • 121: Central banks (excluding transactions conducted with Danmarks Nationalbank in the context of monetary policy operations)
  • 122: Deposit-taking corporations except central banks
  • 123: Money market funds
  • 124: Non-MMF investment funds
  • 125: Other financial intermediaries than insurance and pension funds
  • 126: Financial auxiliaries
  • 127: Captive financial institutions and money lenders
  • 128: Insurance corporations
  • 129: Pension funds

Furthermore, the transaction volume must exceed kr. 5 million.

Robustness requirements

Danmarks Nationalbank has established criteria for the transaction dataset. The purpose is to ensure that the transaction dataset is representative of the overnight money market in Danish kroner and to reduce the risk of manipulation of the reference rate.

A short-term contingency procedure for calculation of DESTR will be triggered where:

  1. the total transaction volume is below kr. 0.5 billion, or
  2. the total transaction volume is below kr. 1.5 billion, and one bank represents more than 70 per cent (rounded to nearest whole number) of the total transaction volume.

Trimming

In order to avoid outliers in the transaction dataset that could affect DESTR, 12.5 per cent of the transaction volume (at each end of the distribution) is trimmed before calculation of the reference rate. Trimming the dataset is in line with international practice to avoid outliers.

Normal calculation method

Provided the transaction dataset meets the robustness requirements, Danmarks Nationalbank calculates DESTR according to the normal calculation method. DESTR is thus determined as a volume-weighted mean of interest rates in the trimmed dataset for calculation.

The methodology for DESTR follows international practice for calculating transaction-based reference rates.

Alternative calculation method

If the robustness requirements are not met, DESTR is calculated using an alternative calculation method.

DESTR will be calculated as the level of the central bank rate plus the average of the spread between DESTR and the central bank rate over the previous five days for which a normal calculation method has been used, excluding the days with the highest and lowest spreads to the central bank rate.

The central bank rate is defined as the average of the current account rate and Danmarks Nationalbank’s lending rate.

FAQs about DESTR

DESTR (Denmark Short-Term Rate) is a short-term reference rate based on transactions made in the unsecured deposit market in Danish kroner. It is the preferred short-term reference rate in Danish kroner. 

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


Download the publication ”Recommendation of DESTR as the preferred risk-free reference rate in Danish kroner” from june 2021.

The DESTR calculation method is described in the document ‘DESTR methodology and policies’, which is the formal basis for the methodology and publication rules for DESTR.


Download DESTR methodology and policies

Danmarks Nationalbank publishes DESTR at 10:00 CET on each Danish banking day. For example, DESTR published on 5 April 2022 at 10:00 CET reflects the trading activity on 4 April 2022 (the previous Danish banking day).

If errors are detected following the publication of DESTR that affect the rate by more than 2 basis points, Danmarks Nationalbank will revise and republish DESTR once on the same day at 11:00 CET. No changes will be made to DESTR after that time.

Summary information on errors larger than 0.1 basis points that are detected after the standard publication and do not meet the republication criteria is reported to the Oversight Committee and published. This information on errors is updated on a semiannual basis.

If, exceptionally, Danmarks Nationalbank does not publish DESTR at 11:00 CET at the latest, the contingency procedure for DESTR applies as described in ‘DESTR methodology and policies’.

DESTR is published via Danmarks Nationalbank’s market information distribution platform (DAMP) and the website. The DAMP platform is the main publication channel for DESTR.

DESTR is also available via market vendors:

Bloomberg:

• Ticker: <DESTR Index>

Refinitiv:

• RIC: <DESTR=DKNA>

• Ticker: <DESTR>

Danmarks Nationalbank does not charge for the use of DESTR or license its use. 

 

Together with DESTR, the following related information is published:

• total nominal value of transactions before trimming in kr. million (‘Volume’)

• percentage of total nominal amount reported by the day’s largest contributing bank as a whole number (‘Share of volume of the largest active bank’)

• publication type: Standard or Republication

• calculation method: Normal or Contingency

• DESTR Compounded Index

Danmarks Nationalbank does not comment on the daily development of the rate and accompanying data.

Historical data for DESTR and related information can be found in Danmarks Nationalbank’s statistical data warehouse. Data will be available on the next banking day.

See Historical DESTR data in Danmarks Nationalbank’s StatBank
Danmarks Nationalbank is the administrator of DESTR and retains the overall responsibility for the rate. To support the governance of DESTR, Danmarks Nationalbank has established an internal Oversight Committee to review, challenge and report on all aspects of the decision-making process regarding DESTR.

Any person may submit a written complaint to Danmarks Nationalbank about any aspect of the decision-making process regarding DESTR that they reasonably consider has significantly affected their interests. The complaint may be submitted by e-mail to destr@nationalbanken.dk with the subject ‘DESTR COMPLAINT’.

Danmarks Nationalbank strives to respond fairly, consistently and in a timely manner to all reasonable complaints submitted. In deciding whether to investigate a complaint, Danmarks Nationalbank will consider its severity and significance based on the information contained in the written complaint, including any additional information that Danmarks Nationalbank may ask the complainant to provide. If deemed relevant, the  Oversight Committee will be informed of the written complaint.

Besides DESTR, Danmarks Nationalbank publishes an index exclusively calculated based on historical daily values of DESTR. The rules for publishing and the platforms will be the same as for DESTR. The index enables a calculation of a 'DESTR average interest rate' for any given period of time.

Bloomberg ticker:

<DESTRCMP Index> 

Danmarks Nationalbank does not charge for the use of DESTR Compounded Index or license its use.

The precise calculation and publishing rules for DESTR Compounded Index can be downloaded.

Data for pre-DESTR are available for the period 1 March 2017 to 31 March 2022.

DESTR and pre-DESTR are subject to the same calculation method, and pre-DESTR is based on data collected from the ten largest domestic banks in Denmark. 

Pre-DESTR was published during the DESTR trial period and at the same time formed the basis for the calculation of the spread between the Tom/Next rate and DESTR during the transition period for the Tom/Next rate.

In November 2020, Danmarks Nationalbank took over responsibility for the new reference rate DESTR from Finance Denmark. In June 2021, Danmarks Nationalbank published a report evaluating the underlying DESTR data and methodology. Data for pre-DESTR were used in the evaluation of DESTR.

Historical data for pre-DESTR can be found in Danmarks Nationalbank’s statistical data warehouse.

 

Download the publication ”Recommendation of DESTR as the preferred risk-free reference rate in Danish kroner” from june 2021.

See Historical DESTR data in Danmarks Nationalbank’s StatBank

After Danmarks Nationalbank took over responsibility for DESTR in November 2020, the Working Group on Short-Term Reference Rates was established. Its purposes were to

(i) recommend the preferred short-term reference rate in Danish kroner

(ii) and if DESTR was chosen as the preferred reference rate, develop an adoption plan for DESTR. This included a recommendation for the transition away from the existing reference rate, Tom/Next, to DESTR and a plan for the discontinuation of the Tom/Next rate.

Publications from the Working Group, agendas, minutes of meetings and the terms of reference of the Working Group can be found here.

On the recommendation of the Working Group, the administrator of the Tom/Next rate, the Danish Financial Benchmark Facility (DFBF), changed the methodology for calculating the Tom/Next rate to become DESTR plus 19.0 basis points from the launch day of DESTR for a transitional period. 

The discontinuation of the Tom/Next rate will be completed on 1 January 2026 after the transition period to DESTR.


Download the publication ”Public Consultation on the Transition from Tom/Next to DESTR” from october 2021.

Find out more