On 13 September 2018, the European Central Bank (ECB) published a press release outlining the recommendations of the private sector working group on euro-risk free rates (the Working Group). The Working Group has recommended that the euro short-term rate (ESTER) should become the new euro risk-free rate and replace EONIA. The recommendations of the Working Group are not binding, but represent a market consensus as regard the euro risk-free rate.

The Working Group recommends this on the basis that EONIA as it stands will no longer meet the criteria of the EU Benchmarks Regulation, and will therefore see its use restricted as of 1 January 2020. ESTER will also provide a basis for developing fall-backs for contracts referencing the Euribor, as the compliance of its reformed methodology with the requirements of the EU Benchmarks Regulation will be assessed in 2019.

The decision was based on the outcome of the Working Groups consultation, published August 2018.