Bank of Ireland Benchmark Reform Hub

Benchmark rates, also known as interest rate benchmarks and reference rates, are used in various different types of financial products and contracts and reflect what it costs for banks to borrow from each other. Traditionally benchmark rates are determined by using expert judgment of a contributing panel of banks and calculated and published daily by an independent industry body. Benchmark rates are used selectively by banks in some but not all products and services. Bank of Ireland tends to use benchmarks such as the London Interbank Offered Rate (“LIBOR”) and Euro Interbank Offered Rate (“EURIBOR”) in business or corporate transactions as well as bank to bank transactions.
Since 2014, financial institutions worldwide have been progressively moving towards replacing or reforming benchmark rates in what is known as Benchmark Reform.
New and reformed benchmark rates are designed to be Risk Free Benchmark Rates (“RFRs”) and largely based on actual transactions with minimal reliance on expert judgment from contributing banks. As a result they will be more transparent and reliable. These new RFRs need to be established and available for use before 31 December 2021. After this time it is expected that the current LIBOR rates will no longer be eligible for use.
EURIBOR has updated its methodology to be compliant with regulatory requirements (EU Benchmarks Regulation) and will be available beyond 2021 to support EURO transactions or products.
The EU Benchmarks Regulation, which came into effect across the EU on 1 January 2018, supports the reform process, introducing a common framework and consistent approach to benchmark regulation across the EU. It requires EU financial institutions to have robust plans in place covering their usage of benchmarks, including clear fall-back mechanisms, should the benchmark be unavailable for any reason.
Financial institutions including Bank of Ireland have already begun to prepare for the transition to new benchmarks, so if you have any queries please talk to your Bank of Ireland Relationship Manager or get in touch at
The following are some questions and answers that will help you understand Benchmark Reform and how it might impact any products you hold or transact in with Bank of Ireland. We have also included some links to external websites where you can find out more about Benchmark Reform.

  • What is Benchmark Reform?
    The financial crises in late 2008/2009 highlighted liquidity and reliability issues with LIBOR benchmarks and caused regulatory bodies to scrutinise how benchmarks are set and administered.
    Since 2014, financial institutions worldwide have been progressively moving towards establishing new Risk Free Interest Rate benchmarks to replace or reform benchmarks. In 2019, EURIBOR reformed its methodology to be compliant with regulatory requirements and can continue to be used. However it has been announced that continuity of LIBOR rates cannot be guaranteed past the end of 2021.
    Replacement benchmarks or Risk Free Rates (RFRs) differ from traditional benchmark rates in that they are designed to be based on actual transactions, with minimal reliance on expert judgment from contributing banks. These new rates will replace traditional benchmarks such as LIBOR for interest rate-linked products, and financial instruments, such as fixed income securities, loans and derivatives. This move to Risk Free Benchmark Rates is commonly known as Benchmark Reform.
  • Why are you telling me about it now?
    Although the final date for reliance on current benchmarks is 31 December 2021, we want to let customers know that reform is underway and how it may impact on your financial requirements and products. Although benchmark reform is not applicable to all of our products or every customer, where it is applicable, we need to start planning for a smooth transition to new rates when required.
    If you have existing products with us that are impacted we will be in touch with you well before the end of 2021.
  • Could this impact me?
    Benchmark rates are most common in banking products used by business or large corporate customers, for example, for some business loans the overall interest rate applicable to the loan would be determined by using a benchmark rate plus the Bank’s lending margin. Commonly used impacted benchmarks in Bank of Ireland are LIBOR and USD LIBOR rates.
    EURIBOR has updated its methodology to be compliant with regulatory requirements and will be available beyond 2021. However, customers using LIBOR rates will need replacement rates for maturities beyond 2021. We are working on determining replacement rates based on industry and regulatory guidance and plan to know what these rates are in the coming months and well before the deadline of 2021. We expect to communicate directly with customers in mid 2020 but please feel free to talk to your relationship manager if you require any information in advance of this.
    In addition to loans, customers who use interest rate swaps or derivatives for risk management purposes will be impacted by this reform for any transaction maturing beyond 2021. Your relationship manager will support you in the transition to replacement rates.
    If you have a benchmark product with a maturity before 31 December 2021 there should be no impact.
  • Why can we not just move customers to these new Risk Free Rates now?
    The industry and financial markets have so far only established new Risk Free Rates in overnight markets. For example, US Dollar and Sterling have new Risk Free Overnight rates, USD Secured Overnight Financing Rate (“SOFR”) and reformed Sterling Overnight Index Average (“SONIA”) respectively and the EURO equivalent Euro Short Term Rate (“€STR”) was published on 2 October 2019.
    Overnight rates are not generally used in customer products due to the complexity of interest calculation. Normally customer products are priced on TERM benchmarks, e.g. 1 month, 3 month or 6 month rates. The market has not yet established replacement TERM rates and therefore we do not have a like for like alternative yet and cannot start to transition existing products.
    It is hoped that there will be more clarity on replacement TERM rates in early 2020 and we will update this information as soon as we know.
  • What happens next?
    There is no need for you to do anything just yet. If we are transacting products or services with you that are impacted, we will let you know and also bring your attention to revised terms and conditions to protect you and your product from possible changes due to Benchmark Reform.
    If you have a product maturing after 2021, we want to make you aware that some changes are anticipated and as soon as we have clarity on replacement rates we will be in touch directly with you.
    As we await industry development and clarification on replacement rates for customer products our priority is to ensure that we support you and your business through Benchmark Reform. If you would like to know more please get in touch with your relationship manager or send us an email on