The future of the money market benchmark Euribor became even more uncertain on Thursday after Dutch cooperative Rabobank, one of Europe’s top-rated banks, quit the panel, citing low volume interbank lending transactions.
“The changed circumstances on the money market have strongly affected Rabobank’s business,” the bank said, according to Reuters. “As a result, Rabobank evaluated its contribution to the Euribor panel from a business economics point of view.”
German Landesbank Bayern said that it would also withdraw from the Euribor panel at the beginning of the year, citing “strategic reasons.”
Euribor, Libor’s counterpart, is a key benchmark used to determine the rate at which banks could borrow from other banks. Reports surfaced last year that a number of financial institutions and banking participants had acted to manipulate the rate, Reuters reports.
Rabobank’s decision to leave Euribor comes after two other banks, including Citigroup, one of the world’s largest financial institutions, and Germany’s DekaBank left the Euribor panel late last year in the wake of the scandal. Rabobank fired several traders in connection with the Libor matter, and several former employees of the bank were also suspended by Bank of Tokyo-Mitsubishi.
Additionally, late last year, the European Central Bank called on organizers to restore the credibility of the rate by making calculations based on actual bank-to-bank traders rather than bank estimate submissions, according to Reuters.