Will WIRON replace WIBOR?  The banks fell into their own trap

WIRON's fate hangs in the balance. The decision on whether to finally replace WIBOR will be made within a month – money.pl learned unofficially. Bloomberg also reported this information on Tuesday afternoon.

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Violations were detected by reviewing the so-called data entry on the basis of which this indicator was developed. The data is submitted by banks to GPW Benchmark (GPWB), a benchmark manager licensed by the Polish Financial Supervision Authority (KNF). And they failed.

At the beginning of the month, the newspaper “Dziniek Gazeta Browna” published a report on the administrative measures initiated by the Polish Financial Supervision Authority against the largest banks: Santander, Bicao, Millennium, BNP Paribas and MBank. According to the newspaper's unofficial findings, the case concerns WIRON and is linked to incorrect data provided on its account. Banks face millions of dollars in fines because of this.

As we hear from people who know the background of the matter, it was already known last fall that it would not be possible to make a smooth transition from WIBOR to WIRON by the end of 2024. So, a week before October elections In parliamentary sessions, it was decided to postpone this reform date for three years.

According to the new schedule, the index is scheduled to completely replace WIBOR by the end of 2027. This means that from the beginning of 2028, the WIBOR index will disappear from all contracts worth trillions of zlotys. In its place will appear a new indicator that, along with the bank's margin, will affect interest rates on most loans taken by Poles.

New business plan

The deadlines for the milestones, i.e. points related to the reform timeline – such as the moment of stopping the sale of WIBOR loans – have not yet been updated. The work of the Steering Committee, which oversees and coordinates the activities of the National Task Force, has slowed down for several months due to the changing of the guard in the government, but – as we hear from insiders – it is now returning to normal meeting mode.

The steering committee includes representatives of the Polish Financial Supervision Authority, the National Bank of Poland, Ministry of FinanceThe Bank Guarantee Fund, the Polish Development Fund and the GPW Benchmark. They are supported by a rotating representative of the banking sector, a president who changes from time to time.

According to our sources from decision-making circles, the steering committee does not plan to work on a completely new indicator. I want to use one of the existing ones. It is possible that this is the case Will, Will Lube Warsaw Repo Rate (WRR)But the final decision in this regard has not been taken yet.

According to our sources, the National Reserve Bank's reference rate is also taken into account. The problem is that it does not meet the official requirements set out in the BMR regulation. A month ago, the Ministry of Finance held consultations on this matter. Its inclusion in the Home Loans Act has been considered as an additional indicator for use alongside WEBOR or its successor.

What are the conclusions of this meeting? We wanted to know this, so we asked the press office of the Ministry of Finance for its position on this matter. We are waiting for the answer.

Instead of WIRON, NBP price?

Some banks are already selling loans based on WIRON. The question is what will happen to them when this indicator is “buried”. Its balance sheet includes ING Bank Śląski (housing loans) and Pekao (corporate loans). When we asked these two institutions in January what they intended to do about errors and corrections in WIRON, they responded that they did not see a problem because the index they used for loan interest rates was still being developed and quoted. It comes with a WIRON foldable foot, available in three types: one month, three and six months.

However, a lot has changed since January, even if tensions in the sector have increased. The gloomy mood caused by WIRON's uncertain future was evident during the banking forum held last week. Bankers appealed to decision makers to address this matter urgently.

One of our interlocutors believes that a Wiron loan would be easier to challenge in court than a Wibor loan.

In contrast, we learn from other interlocutors that loan agreements based on flawed WIRON must include so-called abusive terms. This obligation results from the previously mentioned BMR regulation and aims to protect banks from the need to switch from one index to another when necessary. The alternative index included in the virus contracts – according to our source – is likely to be the NBP reference price.

We therefore asked the Polish National Bank whether the reference rate could replace WEBOR. We also wanted to know whether the central bank has any objection to the operation of WIBOR – which is under fire from law firms, and which keeps bankers awake at night – in the financial market until the end of 2027. As in the case of the Finance Ministry, we are also waiting here for a Answer.

Reform is written on the knee

Money.pl's question was answered by the Standards Officer – GPW Benchmark. The message sent states that the WIRON reference indicator was developed in accordance with the BMR rules and regulations.

GPWB is not currently considering discontinuing development of the WIRON index – as the company informed us of this in response to our question.

He adds that, like other officials responsible for interest rate standards, he publishes quarterly reports on his website on the impact of input data corrections on the index.

The company also claims to have transaction data and technological solutions that enable the calculation of other transaction indicators, such as the WRR indicator mentioned above. He stresses that the issue of replacing the WEBOR index is the responsibility of the National Working Group for Indicator Reform and the Ministry of Finance as the authority authorized to issue the regulation for introducing the replacement.

A clear sign of WIRON's failure is the failure to issue Treasury securities based on this index. According to the timetable that requires updating due to the postponement of the reform, the Ministry of Finance should have raised such issues a long time ago. We asked when and if he plans to do so at all. We are still waiting for the answer.

Karolina Wisota, journalist at money.pl

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