Answer to Written Question: CHF LIBOR
(Source: European Parliament)
Answer given by Ms McGuinness
on behalf of the European Commission
The Commission is aware that there are exposures to LIBOR (London Interbank Offered Rates) in the EU that have an end date beyond the announced cessation date of that benchmark. As regards consumers, we are particularly aware of stock of mortgage loans that reference Swiss Franc LIBOR (CHF LIBOR), that are concentrated in a few Member States. The Commission can now replace any reference to LIBOR in contracts and financial instruments governed by the laws of a Member State with a reference to a suitable replacement rate. For this purpose, the Commission is currently conducting a public consultation on the potential replacement of CHF LIBOR references by the alternative rate recommended by the National Working Group on Swiss Franc Reference Rates, (i.e. the Swiss Average Rate Overnight -“SARON”- compounded with a spread adjustment). The consultation seeks the views of all stakeholders, especially consumer organisations. On the basis of the feedback received, the Commission will decide whether to designate a statutory replacement. Finally, it is important to note that this statutory replacement would only apply where parties to the contract have not agreed a contractual replacement already.