Plans to enhance Sibor's robustness proposed

Proposals to anchor Sibor more closely to market moves and enhance its robustness and integrity were jointly released yesterday by the ABS Benchmarks Administration Co (ABS Co) and the Singapore Foreign Exchange Market Committee (SFEMC).

They also issued a consultation paper to seek feedback on their proposals to improve the most widely used reference rate for home loan packages in Singapore.

The Sibor, or Singapore interbank offered rate, is based on the interest rates used by banks in Singapore when lending unsecured funds to each other.

It is administered by the Association of Banks in Singapore (ABS) through its fully owned subsidiary ABS Co, with Thomson Reuters as the calculation agent.

The proposals include changes in methodology for calculating Sibor and scrapping the little-used 12-month Sibor rate.


ABS and SFEMC also said they will continue to explore longer-term alternatives to the Sibor that would involve efforts to further develop the breadth and depth of the Singapore dollar money markets.

"In the meantime, ABS-SFEMC considers it important to strengthen the robustness of Sibor to the extent possible," they said in a statement.

Welcoming the proposals, a spokesman for the Monetary Authority of Singapore (MAS) said: "The ABS-SFEMC proposals seek to anchor Sibor to transaction data to the extent possible and have taken guidance from international standards set by the Financial Stability Board and the International Organisation of Securities Commissions.

"These proposals, along with MAS' upcoming regulatory framework for financial benchmarks, will enhance the robustness and integrity of the Sibor benchmark setting process."