Why EURIBOR Remains a Key European Reference Rate

Summary

The note explains why EURIBOR remains widely used in European swaps and floating-rate notes despite the shift toward overnight risk-free rates such as €STR. It distinguishes EURIBOR from Euro LIBOR: Euro LIBOR was little used and ceased following regulatory action after benchmark manipulation concerns, while EURIBOR was reformed and accepted by regulators.

Because many European instruments already referenced EURIBOR before Euro LIBOR ended, the transition created less pressure to replace it. The answer argues that switching new trades to a €STR-based term rate would add costs without enough benefit while EURIBOR remains available. This is a concise institutional explanation rather than a quantitative comparison; it does not assess the relative market risks or pricing properties of EURIBOR and €STR.

Key ideas

• Euro LIBOR and EURIBOR served different roles in European markets, with EURIBOR already more widely used.
• Regulatory action ended Euro LIBOR, while EURIBOR continued after reform.
• Existing use in floating-rate notes and interest-rate swaps reduced pressure for a broader transition.
• Replacing EURIBOR with a term €STR rate may impose costs without sufficient perceived benefit.

Tags

# Why is Europe still using EURIBOR?


# Why is Europe still using EURIBOR?












With the IBOR->RFR transition, US is now using SOFR and UK is now using SONIA, as reference rates for derivatives and swaps.

In Europe, they have ESTRON ... but they also have EURIBOR. It seems EURIBOR is more popular, both for swaps, and also as a reference rate for FRNs.

Why? Why don't they just move to ESTRON so all three major markets are using RFR rates?

## Answer by Dimitri Vulis (score 3)

https://quant.stackexchange.com/a/85869

Historically, there used to be Euro LIBOR (which few people used) and EURIBOR.

Regulators forced Euro (and other currencies) LIBOR to cease as a consequence of https://grokipedia.com/page/Libor_scandal .

However EURIBOR got reformed in 2019 to the regulators' satisfaction, so the regulators didn't force EURIBOR to cease. https://grokipedia.com/page/Euribor

Even before Euro LIBOR ceased, most FRNs, IR swps, etc already referenced EURIBOR, rather than Euro LIBOR. So ceasing Euro LIBOR had less impact than ceasing other currencies' LIBORs.

There's not enough reason for new EUR trades and instruments to change now. EURIBOR continues to be published. Changing, e.g., to term €STR reset in advance, would incur more costs than benefits.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.