Risk-free rates

Interest rate benchmarks.

(RFR).

In the context of interest rate benchmarks, 'risk-free rates' include SOFR (the Secured Overnight Financing Rate) and SONIA.

The Financial Stability Board (FSB) recommended in 2014 that stakeholders should identify risk-free rates that might be used as alternatives to LIBOR.

As of 2024, this transitional work was substantially complete.

Risk-free rates are also known as near risk-free rates, recognising that they are not entirely risk-free.

Capital asset pricing model

RFRs should not be confused with the theoretically risk free rate of investment return, used in the Capital asset pricing model.

See also

• Benchmark
• Capital asset pricing model
• Credit spread
• €STR
• Financial Stability Board
• Gilts
• Interest rate risk
• LIBOR
• Risk asset
• Risk-free asset
• Risk-free rate of return
• Risk-off
• Risk-off asset
• Risk-on
• SARON
• SOFR
• SONIA
• TONA