Working group on euro risk-free rates

The Working Group on euro risk-free rates is the industry group leading the interest rate reform in the EU.

The working group on euro risk-free rates was initially established  in 2018 by the ECB, together with the Belgian Financial Services and Markets Authority, the European Securities and Markets Authority and the European Commission in order to identify and recommend risk-free rates that could serve as an alternative to current benchmarks used in a variety of financial instruments and contracts in the euro area, such as the euro overnight index average (EONIA) and the euro interbank offered rate (EURIBOR).

The group recommended on 13 September 2018 that the euro short-term rate (€STR) be used as the risk-free rate for the euro area.

The ECB published the €STR for the first time on 2 October 2019 and as of 15 April 2021 the ECB also started publishing compounded €STR average rates with a 1 week, 1 month, 3 months, 6 months and 12 months tenor together with a compounded index based on €STR to derive compounded rates for any non-standard tenor.


Importance of the €STR transition

Careful transition planning by market participants is needed to minimise disruption to markets and consumers and to safeguard the continuity of contracts to the greatest extent possible, including contracts that currently reference a term rate rather than an overnight rate.

The initial working group has analysed the impact of the transition from EONIA to the €STR from different perspectives. The outcome of this analysis is reflected in several documents which include recommendations on how to smoothen the transition to the €STR before EONIA is discontinued on 3 January 2022.

You will find the recommendations of the working group on euro risk-free rates on the transition path from EONIA to the €STR and on a €STR-based forward-looking term structure methodology here.



€STR-based fallbacks for EURIBOR

On 11 May 2021 the working group recommended EURIBOR fallback trigger events and rates in order to support market participants in developing contractual fallback provisions for a scenario in which EURIBOR may permanently cease to exist. 


New key areas of focus of the new working group

The incumbent WG has in the meantime completed its agreed deliverables. In order to continue contributing to the reform efforts in the euro area and facilitate coordination between private sector and public sector efforts in that respect, the WG will continue to exist with updated structure and mandate. The new working group will focus amongst others on:

  • foster the use of €STR in a diverse range of financial products
  • assess the availability of EURIBOR fallback rates to be published by one or more administrators,
  • identify impediments to the timely adoption of EURIBOR fallback provisions and make recommendations to overcome them
  • identifying potential issues related to the impact of LIBOR discontinuation in the EU,
  • coordinating on cross currency issues with similar working groups in other jurisdictions.

▸ Terms of reference


Structure of the group

The working group is chaired by a private sector representative while ESMA provides the secretariat. The working group currently includes 29 voting members and five associations as non-voting members. Three public institutions act as observers, namely the EC, the ECB and ESMA.


Communication toolkit

Good communication is important to enable a smooth transition to the €STR. The initial working group on risk-free rates has prepared a toolkit containing materials to help interested parties with their own communication and education efforts. This communication toolkit currently consists of:


Commitment to transparency

The working group regularly consults market participants and end users and gathers feedback from other public authorities. Its terms of reference are publicly available and the group regularly reports on its meetings. This is to ensure transparency throughout the entire process of identifying and adopting new risk-free rates. Ensuring broad market acceptance is vital for the effective functioning of any alternative to existing benchmark rates.

▸ Competition Law compliance Guidelines


Latest updates

12 December 2023 Minutes of the 13/11/2023 meeting
4 December 2023 Final Statement | News item
20 November 2023 Comparative Table of Available Term €STR Rates
14 August 2023 Minutes of the 13/07/2023 meeting
22 May 2023 Minutes of the 03/04/2023 meeting
4 May 2023 Guidance on EURIBOR Fallbacks for Corporate Lending products
3 February 2023 Minutes of the 13/12/2022 meeting
24 October 2022 Minutes of the 15/09/2022 meeting
26 September 2022 Recommendation on the availability of derivative products referencing €STR
18 July 2022 Minutes of the 17/06/2022 meeting
8 April 2022 Minutes of the 02/03/2022 meeting
3 March 2022

Call for expression of interest issued towards administrators developing €STR-based forward-looking term structure as a fallback in EURIBOR-linked contracts - deadline: 8 April 2022

2 March 2022 Work Programme for 2022/23
26 January 2022 Minutes of the 03/12/2021 meeting
13 December 2021 Statement on Preparedness for the Cessation of EUR, GBP, CHF and JPY LIBORs and EONIA, and ceasing use of USD LIBOR in new contracts, at the end of 2021
9 December 2021 Statement from the EUR Risk Free Rates Working Group
15 November 2021 Letter from the Chairman of the EUR Risk Free Rates Working Group to the European Commission with regards to the designation of statutory replacement rates for GBP & JPY LIBOR
29 September 2021 Minutes of the 29/09/2021 meeting
31 August 2021 Letter from the Chairman of the EUR Risk Free Rates Working Group to the European Commission with regards to the Commission consultation on the draft Implementing Regulation designating a statutory replacement for EONIA 
18 August 2021 Minutes of the 01/07/2021 meeting
26 July 2021 Recommendations from the Working Group on Euro Risk-Free Rates on the switch to risk free rates in the interdealer market
15 July 2021  Letter from the Chairman of the EUR Risk Free Rates Working Group to the European Commission with regards to the transition from EONIA to the Euro Short Term Rate
12 July 2021

Call for expression of interest to join the Working Group on Euro Risk-Free Rates – deadline 30 July 2021


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