| Summary: | The entry into negative territory of EURIBOR rates poses legal questions with significant impact on the entry into and execution of banking credit transactions where the amount interest payable is to be determined by reference to the variation of such rate. This study analyses firstly the possibility of contractually agreeing on a limit to the negative variation of reference rates and secondly the impact of the negative variation of reference rates in agreements that do not provide for such limits. Regarding the latter, the essay analyses, in particular, the possibility of such negative variation resulting in a reduction of the agreed margin and in an actual payment obligation of the lender towards the borrower.
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