Switch to mobile version. Top

ANNOUNCEMENTS - 2021 02 02 - 15:15

The LIBOR benchmark rate will be replaced in loan agreements until the end of the year

In accordance with the regulatory requirements set by the European Union, until the end of 2021 changes will be made to agreements concluded with SEB, in which the LIBOR (London Interbank Offered Rate) is used as the short-term interest rate index. This benchmark will be replaced with EURIBOR or an alternative index depending on the agreement currency.

The interest rate in loan agreements consists of two parts – benchmark rate and added interest rate. The added interest rate is set individually for each bank’s customer. However, the benchmark rates historically have been linked to indices. The most often used indices are LIBOR and EURIBOR.

The European Union regulation on the indices used as benchmarks in financial instruments and financial agreements has been in force since 2018. This regulation sets the requirements with which a benchmark rate must comply in order for it to apply to a loan agreement.

As LIBOR benchmark rate no longer complies with the requirements set in the regulation, it will be replaced in all customer agreements concluded with SEB during this year. In agreements, which use EUR LIBOR benchmark, the index will be replaced with EURIBOR. If the LIBOR benchmark is in other currency, we will offer currency conversion to euros and an equivalent term EURIBOR.

We will individually contact all our customers affected by these changes to explain them in more detail.

Questions and answers about LIBOR benchmark rate replacement

What is IBOR?

IBOR (Interbank Offered Rate) is used in benchmarks or indices linked to benchmark interest rates. For example, EURIBOR (Euro Interbank Offered Rate) and LIBOR (London Interbank Offered Rate).

In loan agreements benchmark rate reflects the price for which the bank borrows money in the market.

Why are the IBOR changes being made?

Financial regulatory institutions have requested to clarify the methodology for setting benchmark interest rates or to set new alternative benchmark interest rates, which would replace the existing ones. The goal is to avoid the risk of manipulation of benchmark rate setting methods in international financial markets, which negatively impacts both significant market participants and financial institutions in general, as well as all households.

To achieve this goal, regulation 2016/1011 of the European Parliament and of the Council has been implemented to set indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (EU regulation on indices).

This regulation sets the requirements for benchmark interest rates, which can be used in financial transaction agreements. The regulation also requires banks to agree with the customer on the possibility of setting a new benchmark interest rate in cases when the current benchmark interest rate is no longer available in the market.

Which benchmark rates will no longer be used from the December 2021?

LIBOR benchmarks (USD, EUR, CHF)
SEB will make changes in agreements, which use LIBOR benchmark rates. They will be replaced equivalent term and currency benchmark interest rate.

If the customer’s agreement currency is euros, the LIBOR benchmark rate will be replaced with equivalent term EURIBOR. However, in cases when other currencies are used in the agreement, we will offer customers the possibility to refinance their liabilities to euros, so the LIBOR benchmark rate can be replaced with EURIBOR.

In cases when refinancing to euros will not be possible, we will agree with the customer on the most suitable solution for the specific case. You can learn more about the replacement of LIBOR benchmark rates in the website of Finance Latvia Association.

After the December 2021 this benchmark rate will be replaced with €STR benchmark rate.

What benchmark rates will be applied after the December 2021?

We will continue to use EURIBOR benchmark rate, as its new methodology has been confirmed and comply with EU regulation on indices.

I have LIBOR in my agreement. What should I do?

We will individually contact all customers whose agreements will be changed to thoroughly explain the process and necessary actions.

We are constantly following market’s standards to choose the most suitable benchmark interest rate in cases when it will not be possible to use the existing benchmark rates. All the necessary changes in agreements will be made free of charge and without changing any other terms and conditions.

More information:


  • +371 26668777
    +371 67779988

    Block payment card and internet bank


    Other questions

    Private customers

    Mon - Fri 08.00 - 18.00

    Business customers

    Mon - Fri 08.30 - 18.00


Uzmanību! Jūsu pārlūkprogramma neatbilst SEB mājas lapas prasībām, lūdzu, atjaunojiet to vai izmantojiet citu ierīci lapas aplūkošanai.

Attention! Your web browser does not correspond to the requirements needed to visit SEB website. Please change web browser or device that you use for browsing the site.

Внимание! Ваш браузер не отвечает требованиям, необходимым для посещения сайта SEB. Просим поменять браузер или устройство, при помощи которого вы производите поиск в браузере.