Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

New benchmark rates to replace Swiss Libor, EONIA next year, EU says

Published 22/10/2021, 12:09
Updated 22/10/2021, 12:30
© Reuters. FILE PHOTO: The new 50 Swiss Franc note is seen at a market stall after it was released by the Swiss National Bank (SNB) in Bern, Switzerland April 12, 2016.  REUTERS/Ruben Sprich

By Foo Yun Chee

BRUSSELS (Reuters) -Two new interest rate benchmarks will replace the Swiss Libor rate and the Euro Overnight Index Average (EONIA) in contracts and financial instruments from next year, the European Commission said on Friday.

They will be replaced by new "risk free" rates, which are compiled by central banks.

Both the Swiss Libor and EONIA, which form the basis for a range of financial contracts such as mortgages, bank overdrafts, and other more complex financial transactions, will cease to be published at the end of this year.

Regulators around the world are seeking to move to risk-free benchmark rates in the wake of attempted manipulation of Libor and other reference rates which have seen some of the world's biggest banks fined billions of dollars in recent years.

The EU executive said the new rates were needed because of outstanding contracts that reference the Swiss Libor and EONIA.

"The statutory replacement will be automatic as of 1 January 2022 and contracts can continue without the need for intervention from contract parties," the Commission said in a statement.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.