While the storm surrounding Eonia has come and gone, its suddenspike higher in late November is raising fresh questions over howto replace Libor and its variants, the ubiquitous borrowingbenchmarks set to be phased out.

Eonia, which is derived from actual overnight unsecured lendingbetween banks, surged 12 basis points in the two days leading up tothe end of November, sending the fixing to the highest since March2016. The spike was likely exacerbated by paltry underlying volumeof just 5.7 billion euros ($6.7 billion), analysts say, abouta third of the average over the previous five years.

The worsening liquidity is a worry to market participants asregulators outside the U.S. look to shift toward unsecured,uncollateralized transaction-based rates as alternativesto posted benchmarks such as Libor, which have provensusceptible to manipulation. Concerns over Libor's successor flaredup in July after the U.K.'s Financial Conduct Authority said itintends to stop compelling banks to submit figures that underliethe benchmark by the end of 2021, forcing governments to speed uptheir implementation time lines.