Banking
New benchmark rates to replace Swiss Libor, EONIA next year, EU says
Published by maria gbaf
Posted on October 25, 2021
2 min readLast updated: January 29, 2026
Global Banking & Finance Review®
Company
Published by maria gbaf
Posted on October 25, 2021
2 min readLast updated: January 29, 2026
The Swiss Libor and EONIA will be replaced by new risk-free rates in 2022, ensuring continuity for financial contracts.
By Foo Yun Chee
BRUSSELS (Reuters) -Two new interest rate benchmarks will replace the Swiss Libor rate and the Euro Overnight Index Average (EONIA) in contracts and financial instruments from next year, the European Commission said on Friday.
They will be replaced by new “risk free” rates, which are compiled by central banks.
Both the Swiss Libor and EONIA, which form the basis for a range of financial contracts such as mortgages, bank overdrafts, and other more complex financial transactions, will cease to be published at the end of this year.
Regulators around the world are seeking to move to risk-free benchmark rates in the wake of attempted manipulation of Libor and other reference rates which have seen some of the world’s biggest banks fined billions of dollars in recent years.
The EU executive said the new rates were needed because of outstanding contracts that reference the Swiss Libor and EONIA.
“The statutory replacement will be automatic as of 1 January 2022 and contracts can continue without the need for intervention from contract parties,” the Commission said in a statement.
(Reporting by Rachel Armstrong in London and Foo Yun Chee in Brussels; editing by Catherine Evans and Jason Neely)
The article discusses the replacement of Swiss Libor and EONIA with new risk-free rates starting in 2022.
The replacement is due to past manipulation of existing rates and to ensure more reliable financial benchmarks.
The new risk-free rates will automatically replace the old ones starting January 1, 2022.
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