Therefore, in our eyes, and in the eyes of many other leading central banks, transaction-based interest rates appear to be the way forward to create more reliable reference rates. SWESTR – the Riksbank's response to the shortcomings in STIBOR It is in this context that the Riksbank has undertaken to calculate and publish a fully transaction-based reference rate, SWESTR (Swedish krona Short-Term Rate). The test period for SWESTR ended at the beginning of September, and SWESTR can now be used in financial contracts. The Riksbank calculates SWESTR based on transactions in Swedish kronor that are made in the money market from the current business day to the next business day (overnight, O/N). The transactions reported to the Riksbank come from nine of the Riksbank's monetary policy counterparties, all of which are banks. These are the largest and most active banks in the money market in Swedish kronor.3 The banks report money market transactions of different types and at different maturities, but only those transactions where the counterparty deposits money overnight with the bank, without obtaining collateral, form the basis for the calculation of SWESTR. The banks shall report their transactions with a wide group of counterparties. Transactions with other banks, financial companies, non-financial  4 [8]  companies and the Swedish National Debt Office are used for the calculation of SWESTR. SWESTR shall thus reflect the prevailing level of interest rates in the overnight market in Swedish kronor. There are several differences between SWESTR and STIBOR.
As a result, the costs of the event were relatively low and order was quickly restored in both new currency markets. Despite the U-turn in decision-makers’ communication, the situation had been easy to read by markets, citizens and economic agents in general. A few years later, the Czech economy was hit by a severe currency and financial crisis. Until 1996, the Czech Republic maintained a fixed exchange rate regime and generally stabilisation-oriented (restrictive) macroeconomic policies. However, entry to the OECD and related capital flow liberalisation created an Impossible Triangle. This led to twin deficits and attempts to “half-free” the exchange rate regime similar to those made in the Bretton Woods case. Additional factors such as data errors and an insufficiently credible first reform package only exacerbated the problems. Serious worries of the Czech National Bank about its credibility and reputation contributed to its mistakes. A change of government made acts of government less predictable. The defence of the exchange rate was ended by the central bank without the knowledge of the government. This caused a wide rift to open up between these two authorities. A general lack of coordination of macroeconomic policies, and possibly too restrictive monetary policies, culminated in a severe financial crisis. The outcome was a very costly event that could, with the benefit of hindsight, be judged as avoidable to a significant extent. General U-turns made by policy authorities contributed to these high costs.