New euro unsecured overnight interest rate

On 21 September 2017, the European Central Bank (“ECB”) announced that it would develop a new euro unsecured overnight interest rate based on data already available to the Eurosystem. Prior to the finalisation of the interest rate before its anticipated enactment for 2020, it shall augment existing benchmark rates produced by the private sector and serve as a backstop reference rate. This interest rate is exclusively related to transactions in euro that are reported by banks in the ECB’s money market statistical reporting (MMSR). It will be designed in line with the international standards set by the International Organization of Securities Commissions (IOSCO) on financial benchmarks. A high-level summary of replies from the first consultation, which ran until 12 January 2018, as well as information on further developments, will be published on the ECB website before the end of March 2018. A second consultation concerning its methodology, will follow later in the process.