In order to accelerate the adoption of SONIA as a reference rate in sterling markets, the Bank is seeking views from sterling market participants on:
- the Bank’s intention to publish a daily SONIA Compounded Index. This is intended to support the use of SONIA in a wide range of financial products by simplifying the calculation of compounded interest rates; and
- the usefulness of the Bank publishing a simple set of compounded SONIA Period Averages, which would give users easy access to SONIA interest rates compounded over a range of set time periods. As the set periods used to generate such averages cannot always align with those currently applied in products referencing SONIA, the Bank is seeking to establish whether there is market consensus on how to define the relevant time periods. The Bank is inviting comment on the options presented in this paper, after which it will decide whether it would be helpful to publish such averages.
Responses to the questions posed in this paper are invited by 9 April 2020 via our survey.