ZURICH, Oct 6 (Reuters) - A working group at the Swiss National Bank has proposed using the Swiss Average Rate Overnight (SARON) for secured loans as an alternative benchmark to the traditional Swiss franc Libor, the central bank said on Friday.
The national working group on Swiss franc reference rates (NWG), which combines representatives of private-sector banks and the SNB, “recommended SARON as alternative to the Swiss franc Libor” at a meeting on Thursday, the SNB said.
Around 6 trillion Swiss francs ($6.12 trillion) worth of contracts use the London Interbank Offered Rate (Libor) as a benchmark, making it by far the most important interest rate for the Swiss economy. But the measure is on the way out after banks were fined billions of dollars for trying to manipulate it, and the SNB has been looking at other options.
$1 = 0.9796 Swiss francs Reporting by Michael Shields