The European Central Bank has launched a consultation on the high level features of a new unsecured overnight interest rate for euro transactions, following its announcement of its intention to develop a new interest rate benchmark on September 21, 2017. This new ECB rate will represent the euro unsecured money market in the very short tenor (i.e. overnight) and will be based entirely on transactions in euro that are reported by banks in accordance with the ECB's money market statistical reporting. It will complement existing benchmark rates produced by the private sector and serve as a backstop reference rate.

This consultation is the first consultation in a process which, over the next two years, will see the ECB defining precisely what the new rate intends to measure, developing the calculation methodology and testing the robustness of the rate. The ECB is seeking feedback on a number of aspects in the design of the rate, including on the proposed definition of the rate's underlying interest and the scope of the rate. The ECB also welcomes feedback on any other high-level features or issues which should be taken into account.

Comments are invited by January 12, 2018. The ECB intends to produce the new rate by 2020.

View ECB consultation paper.