EU Tells Firms To Write New Benchmark Rate Into Contracts

Law360, London (May 16, 2019, 2:00 PM BST) -- The European Central Bank has urged the bloc’s financial institutions to begin referring to the European Union’s new unsecured overnight borrowing rate in new contracts and those set to mature before the current scandal-hit eurozone benchmark is dropped in 2021.

Banks should move away from using the existing Euro Overnight Index Average, or EONIA, as a reference rate for financial products and contracts, the ECB said on Wednesday. The ECB is asking them instead to use the new wholesale overnight bank borrowing rate, known as the Euro Short-Term Rate, known as €STR, when it begins publishing the new benchmark in October....

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