Most French institutions are currently using external references to determine residential loans variable rates. Against this background they’re not expected to use the EBA reference rate.
Yet, the proposed formula is satisfying.
ASF concern is about the effect on the consumer of a stressed simulation based on the EBA reference rate as regard to the French rule of maximum authorized rate (“taux d’usure”).
In fact it could lead to a situation where the rate to be used in the European Standardised Information Sheet, calculated on the basis of EBA’s formula, is above the authorized interest rate in France. From this point of view, it is essential that it is clearly established that the ESIS remains a non-contractual document and that EBA’s reference rate, used as an illustrative example of a stressed situation, is purely informative.
We agree with the underlying rate to be input into the formula.