And the economic situation in the euro area suggests they are still playing a role. The most recent GDP data confirm that the recovery in the euro area remains uniformly weak, with subdued wage growth even in non-stressed countries suggesting lacklustre demand.
But in most cases, transition to an overnight RFR is feasible and a range of products that previously referenced LIBOR have successfully transitioned to RFRs. Use of the available overnight RFRs compounded in arrears is preferable to the alternative of using a forward-looking term or credit-spread adjusted RFR that is not robust.