Written Question: CHF LIBOR
(Source: European Parliament)
Date submitted: 14 April 2021
Priority question for written answer P-002013/2021
to the Commission
Bogdan Rzońca (ECR)
Subject: CHF LIBOR
The amended Benchmarks Regulation (BMR) introduces the principle that the Commission may designate one or more replacements for a benchmark which is in the process of cessation or being wound down. This new Commission power means that the replacement benchmark will apply by law to all contracts in which a wound-down benchmark, such as CHF LIBOR (Swiss Francs London Interbank Offered Rate), has been used, if the contract contains no relevant fallback provisions.
This issue has an important consumer protection angle for the banking sectors in several EU countries, including Poland, as there are almost 450 000 outstanding mortgage loans with LIBOR CHF interest rates. The vast majority of these consumer mortgage contracts with CHF LIBOR as a benchmark were concluded before the BMR came into force. Therefore, there are no fallback clauses in those contracts.
- Is the Commission aware of this issue and its consumer angle?
- Does the Commission support the idea of indicating one specific replacement for CHF LIBOR (e.g. SARON – Swiss Average Rate Overnight) without leaving the possibility for each market participant to choose a substitute from among the few solutions?
- What will the Commission’s next steps be?