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Euribor - information about Euribor
For current Euribor interest rates please click here.
This page contains detailed background information on Euribor.
Euribor in brief
Euribor stands for Euro InterBank Offered Rate. Euribor is the average interest rate at which a selection of banks (the panel banks) lend one another unsecured funds denominated in euros. Although reference is often made to the Euribor interest rate, there are actually 5 rates, each with a different maturity (until November 1st 2013 there were 15 Euribor rates). These maturities range from 1 week to 12 months (see the links at the bottom of this page). There is also an overnight rate (maturity of 1 day) but that rate is referred to as the Eonia interest rate. The official Euribor interest rates are calculated and announced once per working day at around 11:00 a.m. by Thomson Reuters. This website shows the current Euribor interest rates about 2 hours later.
The significance of the Euribor interest rates
Euribor is considered to be the most important benchmark in the area of short-term loans in euros. What LIBOR is for interbank loans in currencies such as US dollars and pounds sterling on the London money market, Euribor is for loans in euros on the European money market. Euribor is used as the base rate for a large number of financial products such as futures, options and swaps. Banks also often use the Euribor interest rates as the base rate when setting the interest rates on loans, savings and mortgages. Hence there are mortgage products in a number of European countries where the interest rate consists of the 1 or 3 month Euribor rate with a fixed supplement. Because Euribor is an important benchmark, many professionals and private individuals carefully monitor changes in the Euribor rates.
The creation of Euribor
The Euribor interest rates were introduced in 1999 at the same time as the euro introduction. Before 1999 we already had a similar interest rate under the name Aibor. There were also local reference rates in various countries at that time, such as the PIBOR rate in France and the Fibor rate in Germany. All these rates arose from the need for a benchmark for lending rates.
Euribor panel banks
The text above refers to a selection of banks (the panel banks). This selection is made by a committee from the Federation of European Banks. The panel of banks consists of leading banks with the largest volume in the money market in the eurozone. Because it involves leading banks the Euribor rates can be considered to be the lowest interbank lending rates for euro loans.
Euribor calculation method
Every panel bank must inform Thomson Reuters before 10:45 a.m. CET at what interest rates it is concluding/can conclude euro loans in the interbank money market. Once Thomson Reuters has gathered the rates from all panel banks, the highest and lowest 15% of values are eliminated. The average of the remaining 70% ‘mid values’ makes up the official Euribor rate.
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