Discontinuation of London Interbank Offered Rate (LIBOR)


The London Interbank Offered Rate (LIBOR) is a reference rate currently published by International Exchange (ICE) Benchmark Administrator (IBA) on daily basis in 5 currencies (USD, EUR, GBP, JPY, CHF) and 7 tenor (overnight, 1 week, 1 month, 2 months, 3 months, 6 months, 1 year). LIBOR is widely used as a benchmark rate for financial contracts, including derivative, bond, and loans.

LIBOR Publication Discontinuation

On 05 March 2021, the UK’s Financial Conduct Authority (FCA), as the authority that oversees the publication of the London Interbank Offered Rate (LIBOR), announced to discontinue the publication of the London Interbank Offered Rate (LIBOR) as follow:
• GBP, EUR, CHF, JPY LIBOR for all tenor and USD LIBOR 1Week & 2 Month by 31 December 2021.
• USD LIBOR O/N, 1Mo, 3Mo, 6Mo and 12Mo by 30 June 2023.

Alternative Rates

Financial Authorities in several countries of the affected currencies have established working groups with the aim of determining and developing alternative interest rates for LIBOR and to publish these alternative rates.

The alternative rates selected to replace LIBOR are as follows:


Alternative Rates


SOFR (Secured Overnight Financing Rate)


TONA (Tokyo Overnight Average)


Reformed SONIA (Sterling Overnight Index Average)


€STR (Euro Short-term Rate)


SARON (Swiss Average Rate Overnight)



Difference between LIBOR and Alternative Rates


Alternative Rates

Tenor Structure

Multiple Tenor (Overnight to 1 year)

Overnight Only

Rate Calculation

Calculated based on the data submitted by the panel banks (Submission based)

Calculated based on the actual transaction data in the market (Transaction based)

Interest Rate Determination

The interest rate is determined at the beginning of each interest period based on the prevailing LIBOR (Forward Looking)

The interest rate will depend on the historical data of the daily interest rate (Backward Looking)

Interest Calculation Method

The interest rate is available at the beginning of each interest period (in Advance)

The interest rate is available at the end of each interest period (in Arrears)


PT Bank Danamon Indonesia Tbk (“Bank Danamon“) LIBOR Discontinuation Process

March 2020
Bank Danamon established a project team to assess impact of the LIBOR Discontinuation and prepare the necessary action plan.

November 20th, 2020
Bank Danamon adhered to the ISDA Fallback Protocol.

October 2020 - Ongoing
Bank Danamon contacted and informed the affected customers about LIBOR discontinuation and provide updated information regularly.



Potential Impact to affected Customers

The use of the alternative rate and any adjustment spread may result in Customer‘s facility or any other financial instrument in Bank Danamon performing differently than if the original LIBOR rate had continued to apply. This includes, but not limited to, changes in the interest rate  calculation of the product, the need to amend existing agreement and the possibility that the product may no longer fulfill its original intended purpose.

Customer with LIBOR exposures beyond the LIBOR discontinuation date as detemined by  FCA, will be affected by the permanent cessation of LIBOR and need to choose a transition approach that is suitable for customer‘s needs.

If you have any questions regarding your facility or any other financial instrument that use LIBOR as reference rate, you can contact your Relationship Manager for the latest information regarding the follow-up to your facility or other financial instruments that will be affected by the permanent cessation of LIBOR.



The information on this website has been prepared for general informational purposes only and does not constitute legal, commercial or professional advice and should not be relied on as such. The information on this website has been taken from sources which we deem reliable. However, Bank Danamon makes no representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or completeness of the information contained on this website or as to any information contained on this website or any other such information remaining unchanged after the issuance date. 

You should contact your own legal, tax or other professional advisors on the possible implications of the changes. Bank Danamon does not accept or assume any liability for the information set out herein nor for any loss or damages of any kind incurred by you or anyone in connection with acting or refraining to act on such information. Information contained on this website may not be reproduced or disseminated, in whole or in part, without the prior consent of Bank Danamon and is not intended for distribution to, or use by, any person or entity in any jurisdiction or county where such distribution or use would be contrary to law or regulation.