Yesterday’s ECB publication continues its practice of following where the Bank of England and the NY Fed have led, which is understandable because the reformed EURIBOR was approved last year for use under the BMR and so will continue, and it was notable that the BAT facility in March this year contained fallback wording only for USD and GBP and not for EUR. The ECB and ESMA approach has been to see if an EUR RFR-based rate gains traction or not, without pushing for one in the way the FCA and the NY Fed have. Back in September 2019, Steve Maijoor, the head of ESMA, said that EURIBOR was remain for "the foreseeable future", with ESTR as a fallback and that "It will...be up to market forces to translate ESTR into a success story", and ESTR liquidity "is a crucial factor for the calculation of forward-looking term structures…". The ECB noted yesterday that:
publication of a compounded €STR would support international consistency. In a number of major jurisdictions, such as the United States and the United Kingdom, the RFRs are expected to take over from LIBOR for a large variety of contracts upon the discontinuation of the benchmark. Accordingly, the Federal Reserve Bank of New York as well as the Bank of England have also committed to publishing compounded RFR rates and/or daily indices.
but at the same time:
While no discontinuation of EURIBOR is foreseen, the availability of similar compounded rates for the euro will facilitate the development of corresponding markets for the euro and therefore facilitate consistency in the way benchmarks are used across major markets…”.
and then 