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The euro short-term rate (€STR): completing the transition to the new euro benchmark

Author

Listed:
  • Huerga, Javier
  • Nguyen, Anne-Lise
  • Nicoloso, Pascal
  • Tsonchev, Vladimir
  • Matas Mir, Antonio

Abstract

The €STR, launched in October 2019, is the official euro-denominated risk-free benchmark interest rate. It fully replaced EONIA from January 2022, after a transition period of more than two years. The article explains what benchmark rates are, why they are important for financial markets and why the ECB needs robust and reliable benchmark rates from a monetary policy perspective. It provides an overview of the close cooperation with market participants, the creation and main features of the €STR, how it is calculated on the basis of MMSR data, the robustness of its production and overall framework and the transparency policy on errors. JEL Classification: E49

Suggested Citation

  • Huerga, Javier & Nguyen, Anne-Lise & Nicoloso, Pascal & Tsonchev, Vladimir & Matas Mir, Antonio, 2022. "The euro short-term rate (€STR): completing the transition to the new euro benchmark," Economic Bulletin Articles, European Central Bank, vol. 4.
    • Handle: RePEc:ecb:ecbart:2022:0004:3
    Note: 1113292
    as

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    More about this item

    Keywords

    euro money market; euro short-term rate; financial benchmark; €STR;
    All these keywords.

    JEL classification:

    • E49 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Other

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