ESMA, EBA Recommend Euribor Rate-Setting Revamp
![european-central-bank european-central-bank](/sites/default/files/styles/landscape_750_463/public/import/IMG/196/201196/european-central-bank2-580x358.jpg.webp?itok=k53EuWdP)
ESMA and EBA note "significant weaknesses and insufficiencies in the governance of the Euribor rate-setting mechanism" and urge for their recommendations to be implemented immediately.
The guidelines, which are open for consultation until February 15, recommend greater independence among the steering committee, suggesting that it is inappropriate that the committee be made up of members from participating banks.
A tightening up of the definition of Euribor is also demanded, on top of more regular meetings and a scaling down of rates from the current 15 to a maximum of seven.
"The proposed principles, which are aligned with ongoing EU and international work, will give clarity to benchmark providers and users, and are an immediate step to be taken in advance of potential wider changes in the supervisory and regulatory framework for financial benchmarks," says Steven Maijoor, ESMA chair.
Andrea Enria, EBA's chair, adds: "ESMA and the EBA are convinced that the prompt and full implementation of today's recommendations is an important step towards ensuring that Euribor represents a transparent and reliable benchmark for financial transactions within the European Union."
The proposed principles, which are aligned with ongoing EU and international work, will give clarity to benchmark providers and users, and are an immediate step to be taken in advance of potential wider changes in the supervisory and regulatory framework for financial benchmarks.
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