Replacement of LIBOR and introduction of new SARON reference rate in Liechtenstein
The London Interbank Offered Rate (LIBOR), which has been used as one of the most important benchmark interest rates worldwide since 2009, will become a thing of the past at the end of 2021.
In light of manipulations of reference rates, the UK Financial Conduct Authority announced in 2017 that it would stop determining LIBOR at the end of 2021. For that reason, national authorities and working groups worldwide have developed their own alternative reference rates (ARRs) to replace LIBOR. These reference rates are based on more reliable credit transactions.
In Switzerland and accordingly also in Liechtenstein, the Swiss Average Rate Overnight (SARON) is now the authoritative reference rate for variable-rate mortgages. SARON is a proven reference rate in existence since 2009.