Poland delays Wibor benchmark phase-out for existing loans until 2036

Investing.com -- Poland has postponed the phase-out of the Wibor interbank benchmark for existing loan agreements until the end of 2036, following objections from commercial lenders concerned about transitioning to a new index.

The decision was announced Monday by index administrator GPW Benchmark and the Polish financial regulator. Banks will now have a decade before needing to convert Wibor legacy loans to the new Polstr benchmark rate. The extended timeline aims to minimize potential legal complications from a mandatory conversion, as a substantial portion of Wibor-based loans are expected to be repaid during this period.

Poland will still require lenders to offer new local-currency loan agreements based on Polstr starting from the end of next year. The original plan called for phasing out Wibor by the end of 2027 through a Finance Ministry decree mandating the transition to Polstr. Wibor currently serves as the basis for more than €600 billion ($698 billion) of loans, derivatives and bonds.

The country’s banking association supported the decision, stating it provides lenders time to prepare existing clients for the change and reduces legal and operational risks from an abrupt conversion. The association noted that most existing loans will be repaid under the old benchmark.

Wibor measures the interest rate at which Polish banks declare their willingness to lend funds to one another, typically for three or six-month periods. Polstr reflects the actual cost of overnight borrowing rates, which may be compounded for monthly periods to reduce volatility.

Polstr currently stands approximately 40 basis points below Wibor. The transition forms part of a broader European initiative to replace loan benchmarks based on lenders’ declarations with ones that more accurately reflect actual transactions.

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