DRAFT STORY / PAGE

[NOT TO BE PUBLISHED UNTIL CLEARED BY ALL PARTIES]

The STIBOR rate was established 1986 by the leading banks operating in Sweden to serve as a reference rate for a select few loans and derivatives between the banks themselves. The banks figured they could borrow between themselves and not only from the Swedish Riksbank. It is noted that the first bank to calculate STIBOR was Götabanken.

The management was initially informal. There were no agreements between the parties. All panel banks participated with their contributions on a voluntary basis, as it was in the interest of all panel banks that the interest rate be published (via Reuters at this time). There was also a consensus among the banks that this daily activity was benificial for all parties.

The first financial contract referenced to STIBOR was issued in October 1987, a floating rate note tied to 3-month STIBOR. As the usage of floating rate loans became more common and the derivatives market grew over time STIBOR acquired an increasingly important role in the Swedish economy. During these initial years the tenors used were 1-week, 1-month, 3-months and 6 months. In September 1994 the 9-months and 12-months STIBOR is introduced.

At a later stage, the panel banks ‘participation as contributors was formalized when a multilateral agreement was drawn up, in order to secure the banks’ daily contributions and oblige the banks to participate in the process. The agreement concluded in December 1997 and entered into force on 2 February 1998 states that the banks would enter their quotas in the PMI system no later than 10.55 every banking day on the bank’s side.

The STIBOR average was calculated at 11.00 and published on the STIBOR page in the PMI-system by the bank designated as the calculation agent. In the agreement, Handelsbanken is identified as the calculation agent. In June 1998 the STIBOR T/N-tenor is introduced.

This agreement was replaced by a new agreement that entered into force on 1 July 2006 stating the banks agree to appoint an external calculation agent. We have not yet found a document on such an agreement. But it can be assumed that Nasdaq at about this time (2006/2007?) Took over the role of calculation agent.

Anno 2013 the Swedish Bankers Association (SBA) is appointed principal with responsibility for STIBOR. Nasdaq continues as the appointed Calculation Agent under SBA and the STIBOR 9-months and 12-months are deactivated during March 2013. The remaining tenors: T/N, 1-week, 1-month, 2-months, 3-months and 6-months are active to this day.

With the introduction of the Benchmark Regulation (BMR) during 2016 the concept of the Administrator is introduced along with stricter requirements and criteria for benchmarks.

STIBOR was designated a critical benchmark on 17 October 2018 in accordance with EU Commission Implementing Regulation (EU) 2018/1557. The decision to designate STIBOR a critical benchmark was based on the assessment made by the Swedish FSA (Finansinspektionen) stating that STIBOR is used as a reference in the pricing of over-the counter (OTC) interest rate derivatives denominated in Swedish krona (SEK) for an outstanding notional amount of EUR 3,500 billion. Close to one fourth of SEK-denominated bonds reference STIBOR and STIBOR is used in the pricing of 75% of total loans to Swedish households and non-financial institutions. [Official Journal of the European Union – 18.10.2018]

In 2019 the Swedish Bankers Association (SBA), through its subsidiary Financial Benchmarks Sweden, begun the establishment of the Swedish Financial Benchmark Facility with the sole purpose of being the Administrator of STIBOR. A public procurement of a Calculation Agent to support the Administrator begins, Global Rate Set Systems wins the contract. On April 20, 2020, SFBF makes its first official calculation and publication of the STIBOR benchmark.

In July 2020 SFBF launches the Evolution of STIBOR project. During the project SFBF developed a revised calculation methodology and a new calculation system to accommodate the revised calculation methodology in an automated and controlled manner to safeguard the integrity and robustness of the benchmark, based on actual funding transactions from contributing panel banks.

In December 2021 SFBF lodged an application with the Swedish FSA (Finansinspektionen) to become an authorised administrator of a critical benchmark as per the Benchmark Regulation (EU BMR).

STIBOR has, as of January 2022, fully transitioned to a the revised transaction based calculation methodology which, in an automated and controlled manner, calculates the contributing banks’ cost of fund using the banks funding transactions.