By Huw Jones
LONDON Feb 20 A European bank industry body has
made substantial progress in shielding the Euribor interest rate
benchmark from rigging by traders, two EU regulators on
The European Securities and Markets Authority (ESMA) and the
European Banking Authority (EBA) published guidelines a year ago
as they sought to restore public confidence in Euribor, the Euro
Interbank Offered Rate.
Several banks have been fined for manipulating Euribor and
its bigger London counterpart Libor. Both rates are used to help
price trillion of dollars worth of financial products from home
loans to credit cards.
ESMA and EBA said that Brussels-based Euribor-EBF, the body
that compiles the benchmark, had applied four of their
recommendations in full and a further six in part.
"Euribor-EBF is on the right path," EBA Chairman Andrea
Enria said in a statement.
"Its progress in terms of governance and conduct reflects a
strong commitment to ensuring the quality of its benchmarks. I
remain confident that the Euribor-EBF will soon complete its
work, building on the continued support and commitment of panel
banks," Enria added.
The guidelines from the watchdogs are an interim fix until
the European Union passes a new law to regulate major financial
benchmarks, although a significant vote on the law was delayed
ESMA Chairman Steven Maijoor said Euribor should also be
ready to respond to advances in international cooperation on
reforming interbank benchmarks.
The watchdogs said Euribor compilation would have to be
"brought in line" with any reform requirements from a global
task force put together by the Financial Stability Board, which
is due to report to leaders of the Group of 20 economies (G20)
Reform of Euribor so far has focused on cutting the number
of maturities and other different forms of Euribor from 15 to
eight and putting in place a system of checks on the quotes from
banks used to compile the benchmark.
Guido Ravoet, chief executive of Euribor-EBF, said the pace
of reform was going according to plan but that the
implementation of some recommendations would depend also on
progress at the global level.
"Of course, rapid and further progress is essential," Ravoet
said in a statement.
He said Euribor-EBF had also opened several new work streams
in order to find alternative benchmarks based on real market
Regulators want market benchmarks to be based on actual
transactions where possible, because they are more easily
verified and less prone to manipulation than quotes.
Thomson Reuters compiles and publishes the daily Euribor
figures for Euribor-EBF.