23/08/2021 (Agence Europe) – The European Commission launched a public consultation, from 3 to 31 August, on a draft implementing regulation proposing a statutory replacement rate for the Swiss Franc LIBOR (CHF LIBOR), which will cease to be published on the 1 January 2022 (see EUROPE 12684/34). Thirty-five billion euros of CHF LIBOR mortgage contracts currently exist in the European Union, particularly in Poland, Austria, Slovenia, the Netherlands and France. “The lack of a clear and unambiguous replacement rate in CHF LIBOR mortgage contracts would give rise to legal uncertainty, which may trigger litigation”, explains the Commission. It therefore proposes to designate a statutory replacement rate for relevant tenors of CHF LIBOR in legacy cash contracts, calculated as a compound rate of SARON (Swiss Average Rate Overnight), to which a fixed spread adjustment would be applied. See the draft text that has not yet been adopted: https://bit.ly/2W9WAC9 (MF)