Euro short-term rate (ESTER)
The ECB’s Governing Council has decided to develop a euro short-term rate (ESTER) based on data already available to the Eurosystem. ESTER will reflect the wholesale euro unsecured overnight borrowing costs of euro area banks and will complement existing benchmark rates produced by the private sector, serving as a backstop reference rate.
When will it be published?
The ECB will begin publishing ESTER by October 2019.
The rate will be available by 09:00 CET on each TARGET2 business day, based on actual individual transactions from the previous day. It will be published on the ECB’s website, via the ECB’s Market Information Dissemination (MID) platform and the ECB’s Statistical Data Warehouse.
How will it be calculated?
The methodology for calculating ESTER was determined taking into account feedback received in two public consultations and in line with the international standards set by the International Organization of Securities Commissions (IOSCO) on financial benchmarks. The methodology will be reviewed periodically.
ESTER will be calculated based entirely on actual individual transactions in euro that are reported by banks in accordance with the ECB’s money market statistical reporting (MMSR).
More details on the methodology.
What is pre-ESTER?
Until ESTER is available, the ECB will publish figures referred to as pre-ESTER, which market participants can use to assess the suitability of the new rate.
Pre-ESTER is calculated using the same methods as defined for ESTER and is based on data including all revisions in terms of cancellations, corrections and amendments submitted by reporting agents at the time of calculating the rate. The regular releases may also include revisions to previously published data. In addition to the data, the releases include charts illustrating key features of the pre-ESTER rate.
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More details on pre-ESTER.
Disclaimer
Pre-ESTER is only a set of indicators for ESTER. Its publication is for information purposes only and the data are not intended for use as a benchmark in any market transaction, whether directly or indirectly.
What is the difference between pre-ESTER and ESTER?
Pre-ESTER is calculated using the same methods as defined for ESTER. Pre-ESTER differs in that it is based on final data and includes all revisions in terms of cancellations, corrections and amendments submitted by reporting agents at the time of calculating the rate, while ESTER will be published every morning and take into account only the data received by the submission deadline of 07:00 CET that morning.
Public consultations
A first public consultation was held to gather feedback from market participants and all other interested parties on the high-level features of the new rate. It ended on 12 January 2018.
A second public consultation was launched on 15 March 2018 to gather feedback from market participants and all other interested parties on the defined methodology of the new rate, as well as on key operational and technical parameters. It ended on 20 April 2018.