Articles Published  04.05.2017

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Euribor Pre-Live Verification Program Outcome


©EMMI

  Source: EMMI


EMMI has concluded the data analysis conducted in the context of the Euribor Pre-Live Verification Program to determine the feasibility of a seamless transition to a transaction - based Euribor.

The Program has provided EMMI with a clear understanding of the market underpinning Euribor, which shows a change in the market activity as a result of the current regulatory requirements and a negative rate interest environment. During  the  Pre-Live Verification  Program EMMI collected transactional data of 31 banks from 12 different countries for a six-month period running from September 2016 to February 2017. EMMI ’s analysis has concluded that under the current market conditions it will not be feasible to evolve the current Euribor methodology to a fully transaction-based methodology following a seamless transition path. These findings have been corroborated by analyses carried out by the Belgian Financial Services and Markets Authority (FSMA).

“ EMMI has already implemented a robust governance framework for the Euribor benchmark. We remain committed to reform the benchmark methodology to anchor Euribor in real transaction market data to the extent possible, in line with the EU Benchmarks Regulation. Over the next months we will focus on develop ing a hybrid methodology, capable of adapting to the prevailing market conditions, and hence fit - for - purpose at all times, said Guido Ravoet, Secretary General of EMMI.

Euribor, which is a critical benchmark of systemic importance for financial stability will be continued as a quote - based benchmark while the development of the hybrid methodology is ongoing. “ We view our reform efforts as an inclusive  process where we will continue consulting with public authorities, panel banks and all market participants to ensure support for the methodological reforms, reiterated Ravoet.

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