Euribor, Eonia Panels to Be Split After Banks Left Amid Probes

Panels of banks setting Euribor and Eonia rates will be separated starting next month as the group managing the benchmarks seeks to win back lenders that departed in the wake of scandals.

“This decision was taken in the context of the reform of the benchmark’s governance and rate-setting process,” Euribor-EBF, the Brussels-based industry group that oversees the rates, said in a statement on its website today. It seeks to encourage banks to “re-join or join the respective reference rate panels,” the group said.

Citigroup Inc., UBS AG (UBSN) and Rabobank Groep are among firms that have withdrawn their involvement with the euro interbank offered rate, a benchmark for trillions of euros in lending, as regulators investigated attempts to manipulate rates. Six banks have departed from the panels setting both Euribor and Eonia this year, leaving 36 contributors.

Euribor-EBF asked former panel banks to re-join either Eonia or Euribor and said new European Union rules will include the power to force banks to participate.

The European Central Bank said in a separate statement today that it “welcomes the introduction of separate Eonia and Euribor panels” and “strongly encourages banks to remain in, join or re-join the reference rate panels in order to ensure an appropriate level of participation.”

Eonia is a euro-area interbank overnight lending rate.

To contact the reporters on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net; Katie Linsell in London at klinsell@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Shelley Smith at ssmith118@bloomberg.net

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