Interest rate benchmarks including the London Interbank Offered Rate (LIBOR), the Euro Interbank Offered Rate (EURIBOR), the Euro Overnight Index Average (EONIA) and some other Interbank Offered Rates (IBORs) have been or are being replaced or reformed. These changes are expected to cause at least some of these benchmarks to perform differently to the way they have in the past or to disappear. This may impact the HSBC products and services you use and those we provide in the future, such as derivatives, overdrafts and loans (including mortgages), securitisations and deposits, where interest rates of these can be fixed or alternatively calculated by reference to benchmark rates.
For several years, the financial services industry has been transitioning away from IBORs towards ‘Risk-Free Rates’ also known as ‘Near Risk-Free Rates’ (“RFRs”)1 and other alternative rates.
The following rates have either ceased to be published or to be representative and their use has been prohibited for new contracts:
- Sterling (GBP), Euro (EUR), Swiss Franc (CHF), Yen (JPY) LIBOR and US Dollar (USD) LIBOR settings in all tenors;
- Euro Overnight Index Average (EONIA);
- Canadian Dollar Offered Rate (CDOR) 6-month and 12-month settings;
- Thai Baht Interest Rate Fixing (THBFIX);
- Singapore Interbank Offered Rate (SIBOR) 6-month and 12-month settings;
- Mumbai Interbank Forward Offer Rate (MIFOR);
- Singapore Swap Offer Rate (SOR);
- Philippine Interbank Reference Rate (PHIREF).
The use of the following rates has also been prohibited for new contracts:
- Singapore Interbank Offered Rate (SIBOR) 1-month and 3-month settings. These SIBOR settings will cease after 31 December 2024.
- Canadian Dollar Offered Rate (CDOR) 1-month, 2-month and 3-month settings. These CDOR settings will cease to be published after 28 June 2024.
The information of this page provides an overview of the changes as at 1 July 2023 and reflects HSBC’s current understanding and interpretation of the new landscape. It does not constitute any form of advice or recommendation. Our clients should seek guidance from their professional advisors on the possible implications of the changes from a financial, legal, accountancy or tax perspective.
Frequently Asked Questions
For more information
We will periodically update this site and/or provide communications relating to the changes. In the meantime, if you require any further information, please contact your Relationship Manager.
If you would like more general information on interest rate reform and IBOR transition, the Financial Conduct Authority (FCA), the Bank of England, the U.S. Commodity Futures and Trading Commission
(CFTC), the Federal Reserve Bank of New York (FRBNY), the U.S. Alternative Reference Rates Committee (ARRC), the European Central Bank (ECB), the Financial Stability Board (FSB), the International Organization of Securities Commissions (IOSCO) and some of the working groups and industry bodies that are considering these issues have published information which can be found on their websites.