Building new benchmark rates: ECB launches new working group and start of EUOIR from 2018
On 21 September 2017, the European Central Bank (ECB) announced that it was launching a central bank led alternative which would also serve as a "backstop to private sector benchmark rates". This new benchmark rate is currently referred to as the "Euro unsecured overnight interest rate" (EUOIR). Whilst this working title and its pronunciation ('Eeyore' ?) are yet to be finalised, the ECB Governing Council's decision to develop a rate based on data available to the Eurosystem is promising and quite welcome. Further details on how EUOIR will operate are set to be released to "market participants in the course of 2018", followed by a consultation process with a view to finalising and having EUOIR implemented by 2020. This Client Alert considers some of the immediate key steps that affected firms may wish to consider in relation to their documentation and internal processes.