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Norway proposes to place main interbank rate under FSA oversight
[OSLO] Norway will bring the setting of its benchmark interbank rate under regulatory supervision to guard against mispricing of financial instruments and maintain confidence between market participants.
"Reference rates have such an important role in the economy that there are grounds for making the determination of such interest rates subject to public regulation and supervision," the Finance Ministry said in a proposition published Friday on its website.
Finance Norway, which represents banks in the country, agreed in June 2013 to hand over the rate to the Oslo stock exchange. The FSA recommended an overhaul of Nibor following an investigation after bankers outside the country claimed the rate was being rigged.
Nibor is used as a benchmark for mortgage rates, corporate bond yields and derivative contracts. It is intended to reflect the interest rate level lenders require for unsecured money market lending in krone with delivery two days after trade.
The rates are based on an average of contributions from DNB ASA, Danske Bank A/S, Svenska Handelsbanken AB, Nordea Bank Norge ASA, SEB AB and Swedbank AB.