- Benchmarks are publicly accessible and regularly updated interest rates that are a useful basis for all kinds of financial contracts.
- Benchmark rates are widely used by individuals and organisations throughout the economic system. Banks use them when lending to individuals or corporate clients, but they are also used in more complex financial transactions, such as the issuance of securities with variable rates, options, forward contracts and swaps.
- This means they play a key role in the financial system, the banking system and the economy overall.
European benchmark rates are currently undergoing significant reforms. For more details see this ECB explainer here.