14/01/2013
ESMA and EBA unveil proposals for strengthened Euribor
The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) have on January 11 published the results of their joint work on Euribor and propose principles for benchmark rate-setting processes.The publications include a review of Euribor’s administration and management and clear recommendations to the Euribor-European Banking Federation (EEBF) to improve the governance and transparency of the rate-setting process; formal EBA Recommendations to national authorities on the supervisory oversight of banks participating in the Euribor panel; and a joint ESMA-EBA consultation on Principles for Benchmark Setting Processes in the EU which establish a framework for the conduct of benchmark rate-setting and the activities of participants in the process.ESMA and the EBA have made a number of recommendations aimed at addressing the current weaknesses and insufficiencies in the Euribor rate-setting process. The Steering Committee should hold more regular meetings and publish its minutes promptly. The references for Euribor should focus on maturities with the highest usage and volume of underlying transactions. Rates should be scaled down from the current 15 (1-3 weeks and 1-12 months) to no more than 7 (1 and 2 weeks, 1, 3, 6, 9 and 12 months). ESMA and the EBA will review the implementation of these recommendations by EEBF within six months. The deadline for submission of responses to this consultation is 15 February 2013.
