The Steering Committee of the National Working Group (NWG) for benchmark reform reports that ING Bank Śląski S.A. and PKO BP S.A. have executed the first transaction in the Polish financial market for which the WIRON interest rate index has been applied. The financial instrument being traded was an interest-rate derivative contract – Overnight Index Swap (OIS). With the transaction, the banks have tested the operational and technological capacity for applying WIRON in financial instruments. The transaction had a low nominal value and was concluded for a short period.

Interest-rate derivative contracts, including OISs, may be used by banks to hedge interest rate risk of their own and clients’ positions. 

The recent transaction is part of the Implementation Phase of the benchmark reform as described in the Roadmap which involves the accumulation of liquidity in the market of financial instruments being derivative contracts that meet the criteria of an OIS for which WIRON is to be the interest rate benchmark. During the Implementation Phase, as referred to in the Roadmap defined by the NWG for benchmark reform, the swap transactions will be bilateral: they are to be settled between two parties to the contract.

Last Friday, the Steering Committee for benchmark reform endorsed a recommendation on the standard OIS transaction based on WIRON.