On November 12, 2018, the European Money Markets Institute published a second consultation paper (dated October 17, 2018) on its proposals to introduce a hybrid determination methodology for the Euro Interbank Offered Rate (Euribor). EMMI is the administrator for Euribor, a major euro interest reference rate for unsecured interbank short-term lending and borrowing. Euribor was classed as a critical benchmark of systemic importance for financial stability by the European Commission in 2016.

The consultation paper sets out a summary of EMMI's findings during the testing phase for the newly proposed hybrid methodology, which took place between May and July 2018, and provides details on EMMI's proposals for the different methodological parameters that were yet to be specified when EMMI's first consultation was issued in March 2018. The consultation paper seeks feedback from market participants on a number of questions on aspects of the proposed methodology.

Comments on the consultation are requested by November 30, 2018. EMMI expects to publish a summary of the feedback received and a thorough view of the final methodological blueprint, including a concrete timeline and next steps, in early 2019. EMMI expects to submit an application (under the EU Benchmarks Regulation) for authorization as a benchmark administrator to the Belgian Financial Services and Markets Authority by Q2 2019. Panel banks will then be transitioned from the current Euribor methodology to the hybrid methodology. This process is expected to be completed before the end of 2019.

The consultation paper is available at: https://www.emmi-benchmarks.eu/assets/files/D0373B-2018 Second Consultation Hybrid Euribor_full.pdf and details of EMMI's first consultation on the hybrid methodology are available at: https://finreg.shearman.com/european-money-markets-institute-consults-on-hybr.

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