New rules for fixing TALIBOR and TALIBID introduced by Eesti Pank
Starting from 8 February 1999, new rules of fixing TALIBOR and TALIBID are in force. The new rules differ from the earlier ones considerably: TALIBOR and TALIBID are fixed every day, the number of quoted periods and quoting banks has increased.
TALIBOR and TALIBID are fixed by Eesti Pank every business day at 11 a.m. by Estonian time. The highest and the lowest quotation from the quotations of the quoting banks published at their Reuters pages at that moment are disregarded and the arithmetic mean of the quotations is calculated. The results are published by Eesti Pank on its Reuters page ESTI04 (ESTL earlier) on the same business day no later than at 12.00.
From 8 February 1999 the periods to be quoted are 1 month, 2 months, 3 months, 6 months, 9 months and 12 months. The calculation of interest rates to be quoted is based on the actual number of days / 360 and the first day of the periods to be quoted is the same day + 2 banking days (spot).
The quoting banks are Estonian and foreign banks actively operating on the Estonian financial market. They have been included in the list of quoting banks based on their own application and Eesti Pank acceptance. From 8 February 1999, the list of quoting banks includes the following banks:
- Eesti Ühispank
- Optiva Pank
- Merita Bank Plc
- Svenska Handelsbanken
TALIBOR (Tallinn Interbank Offered Rate) and TALIBID (Tallinn Interbank Bid Rate) are average interest rates, calculated on the basis of the respective interbank interest rates on loans and deposits of the quoting banks.
TALIBOR and TALIBID represent the best assessment of quoting banks on the price of funds incorporated from the financial market. A precondition for fixing and publishing TALIBOR and TALIBID is that the rules for fixing the model interest rates are accepted and followed by the quoting banks. Thus, banks no longer need to execute transactions with quoted interest rates.