LONDON (Reuters) – Euribor, a euro version of the tarnished Libor interest rate benchmark, will be available for the foreseeable future, the European Union’s markets watchdog said on Monday.
Regulators are ending the use of sterling and dollar Libor or London Interbank Offered Rate by the end of next year after banks were fined billions of dollars for trying to manipulate the benchmark.
But Steven Maijoor, chair of the European Securities and Markets Authority or ESMA, said Euribor, or Euro Interbank Offered Rate, performed well during recent pandemic-related market volatility from March onwards.
“ESMA will substitute the Belgian FSMA as supervisor of Euribor in January 2022 and I can clearly state that, as of today, the discontinuation of Euribor is not part of our plans,” Maijoor told an online City Week event.
“So, ahead of us there are diverging paths for Libor and Euribor.”
Maijoor also said he wanted users to insert into contracts what alternative or fallback rate would be used in the event of Euribor being discontinued.
Introducing fallbacks has been “somewhat slow to date”, Maijoor said. “This is why I would like to reinforce the message about the importance of introducing fallbacks in Euribor contracts.”
(Reporting by Huw Jones, editing by Louise Heavens and Hugh Lawson)