Bankers take first step towards replacing scandal-hit Euribor rate

Eurozone bankers took a first, tentative step on Thursday towards ditching their scandal-hit Euribor interest rate and finding a new benchmark for trillions of euros worth of mortgages and derivatives. The industry has been at an impasse since it emerged in 2012 that the world's most widely used gauges of bank-to-bank lending rates, Euribor and Libor, had been manipulated, shaking investor faith in a financial system already battered by the crisis.
A working group of 21 euro zone bankers on Thursday published a possible methodology for calculating a successor to the Euribor series. Unlike Euribor, this isn't based on submissions by banks but on actual quotes, that is firm offers to lend at a fixed rate for a certain period, from recognised trading venues, the bankers said in a report. The OIS is based on the ECB's new overnight rate, Ester. This will be published by next October.