This MedLibrary.org supplementary page on Euro Interbank Offered Rate is provided directly from the open source Wikipedia as a service to our readers. Please see the note below on authorship of this content, as well as the Wikipedia usage guidelines. To search for other content from our encyclopedia supplement, please use the form below:
Related Sponsors
The Euro Interbank Offered Rate (or Euribor) is a daily reference rate based on the averaged interest rates at which banks offer to lend unsecured funds to other banks in the euro wholesale money market (or interbank market).
Contents |
Scope
Euribor rates are used as a reference rate for euro-denominated forward rate agreements, short term interest rate futures contracts and interest rate swaps, in very much the same way as LIBOR rates are commonly used for Sterling and US dollar-denominated instruments. They thus provide the basis for some of the world's most liquid and active interest rate markets. Domestic reference rates, like Paris' PIBOR or Frankfurt's FIBOR merged into Euribor on EMU day on 1 January 1999.
Technical features
- Official reference: EURIBOR Technical features
A representative panel of banks provide daily quotes of the rate, rounded to two decimal places, that each panel bank believes one prime bank is quoting to another prime bank for interbank term deposits within the Euro zone, for maturity ranging from one week to one year. Every Panel Bank is required to directly input its data no later than 10:45 a.m. (CET) on each day that the Trans-European Automated Real-Time Gross-Settlement Express Transfer system (TARGET) is open. At 11:00 a.m. (CET), Reuters will process the Euribor calculation and instantaneously publish the reference rate on Reuters pages 248-249, which will be made available to all its subscribers and to other data vendors.
The published rate is a rounded, truncated mean of the quoted rates: the highest and lowest 15% of quotes are eliminated, the remainder are averaged and the result is rounded to 3 decimal places.
Euribor rates are spot rates, i.e. for a start two working days after measurement day. Like US money-market rates, they are Actual/360, i.e. calculated with an exact daycount over a 360-day year.
Euribor was first published on 30 December 1998 for value 4 January 1999.
Interest Rate Swaps
Interest rate swaps based on short Euribor rates currently trade on the interbank market for maturities up to 50 years. A "five year Euribor" rate will be in fact referring to the 5 year swap rate vs 6 month Euribor. "Euribor + x basis points", when talking about a bond, will mean that the bond's cash flows have to be discounted on the swaps' zero-coupon yield curve shifted by x basis points in order to equal the bond's actual market price.
Eonia
The other widely used reference rate in the euro-zone is Eonia, also published by the European Banking Federation, which is the daily average of overnight rates for unsecured interbank lending in the euro-zone, i.e. like the federal funds rate in the US.
See also
External links
- European Central Bank
- Euribor homepage
- Moneyline Telerate
- Euribor Page on Wikinvest
- Euribor Rate, Daily Update (Bank of Finland)
- Current Euribor Rates and Charts
Euribor reference rates are published on the Moneyline Telerate pages 248-249 and 47860-66. Informative historical data can also be found at the Euribor homepage.
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Wikipedia content modification information:
- This page was last modified on 6 January 2009, at 23:20.
Wikipedia Authorship and Review
Wikipedia content provided here is not reviewed directly by MedLibrary.org. Wikipedia content is authored by an open community of volunteers and is not produced by or in any way affiliated with MedLibrary.org.
Wikipedia Usage Guidelines
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article on "Euro Interbank Offered Rate".
The URL for this specific entry is:
All Wikipedia text is available under the terms of the GNU Free Documentation License. (See Copyrights for details). Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc.