7.24.20
Last Friday, July 24, the European Commission (EC) proposed an amendment to the Benchmark Regulation that would allow it to establish a statutory replacement rate to facilitate LIBOR transition for legacy deals. However when deciding which benchmark will be replacing the discontinued one, the proposed regulation mandates that EC must consult outside working groups such as the Alternative Reference Rates Committee (ARRC) and the Working Group on Euro Risk-Free Rates for the EURIBOR. Valdis Dombrovskis, Executive Vice President of the EC for An Economy that Works for People, indicated that this new regulation would help ease the transition away from LIBOR by addressing issues pertaining to legacy LIBOR issues, “we recognize that some LIBOR contracts cannot be renegotiated in due time and that is why we are proposing new legal powers for the EU to replace the LIBOR with another benchmark.”