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The IBOR reform – what changes?

Release date: 29 Jul 2019 | Eurex Exchange, Eurex Clearing, Eurex Group

The IBOR reform – what changes?

The IBOR reform is the biggest change in the capital markets since the introduction of the euro two decades ago. It has been ten years now since the global regulatory community started to initiate the reform of the interbank offered rates (IBORs). Market developments had called into question the long-term sustainability of these critical benchmarks and the aim is now to rebuild confidence.

For the Eurozone, the Euro Interbank Offered Rate (Euribor) and the Euro Overnight Index Average (EONIA) have been identified as critical benchmarks. In September 2018, it was announced that EONIA will be replaced by the Euro Short Term Rate (€STR). This is a two-step process; step one recalibrates the methodology of EONIA to become dependent on €STR (EONIA = €STR + 8.5 basis points), while phase two will involve moving from €STR + 8.5 BP to €STR flat. €STR was also recommended as the basis for developing term fallbacks for contracts referencing Euribor.

While €STR will not be released by the ECB until 2 October 2019, preparations for the transition from EONIA to €STR are well underway, including the publication of a pre-€STR rate.

Need help with the transition to new risk-free reference rates?

What are the next steps? What measurements are planned to switch from EONIA to €STR? How are you affected by this reform and what do you need to do?

Our IBOR reform website has answers to these questions and provides you with a number of services and helpful tools as well as an overview of frequently asked questions.