European Parliament and Council reach agreement on amendment of EU financial benchmarks rules to prepare LIBOR phase-out

Yesterday, the European Parliament and the Council of the EU reached an agreement on the amendments proposed by the Commission to EU rules on financial benchmarks. The envisaged changes aim to ensure that the EU's financial stability is not harmed when a widely used benchmark is phased out, as will soon be the case with the London Interbank Offered Rate (LIBOR). An agreement was also reached to postpone the entry into application of the rules on third country benchmarks until 31 December 2023, with the possibility of an extension by the Commission afterwards. 

The agreed amendments to the Benchmark Regulation empower the Commission to designate a replacement benchmark that covers all references to a widely used reference rate that