Euro Interbank Offer Rate (Euribor)

Posted on by user

Euro Interbank Offered Rate (Euribor)

The Euro Interbank Offered Rate (Euribor) is a benchmark interest rate that reflects the average rate at which selected eurozone banks lend unsecured funds to one another on the short-term money market. It is widely used as a reference for euro-denominated financial products including mortgages, consumer loans, savings accounts, and derivatives.

Key features

  • Maturities: five published tenors — 1 week, 1 month, 3 months, 6 months, and 12 months.
  • Scope: rates represent unsecured interbank lending across the eurozone.
  • Contributors: a panel of major European banks (19 panel banks).
  • Administration: calculated by a benchmark administrator (Global Rate Set Systems Ltd.) and published by the European Money Markets Institute (EMMI).
  • Frequency: rates are published daily and influence a wide range of financial contracts and pricing.

How Euribor is used

  • As a reference rate for consumer and commercial loans (adjustable-rate mortgages, business loans).
  • In pricing and settlement of derivatives (swaps, futures).
  • As an indicator of short-term liquidity and bank funding conditions in the euro area.

Euribor vs. €STR

  • Euribor: a forward-looking set of term rates (1 week–12 months) based on banks’ submitted borrowing/offered rates; includes bank credit and term risk.
  • €STR (Euro Short-Term Rate): a backward-looking overnight rate based on actual overnight transactions; considered a near risk-free reference because it excludes significant bank credit and term risk.
    Euribor and €STR serve different roles — Euribor provides term indications for market contracts, while €STR is used where a transaction-based overnight benchmark is preferred.

Related benchmarks and history

  • LIBOR (London Interbank Offered Rate) was the former global interbank benchmark for many currencies; it has been phased out and replaced in various jurisdictions (e.g., SOFR in the U.S., SONIA in the U.K.).
  • EONIA (Euro Overnight Index Average) was discontinued and replaced by €STR as the euro overnight benchmark.

Quick FAQs

  • What is an interbank lending rate?
    The interest rate at which banks lend to one another short term to manage liquidity and meet reserve needs.
  • How many Euribor rates are published?
    Five: 1 week, 1 month, 3 months, 6 months, and 12 months.
  • Who determines Euribor?
    A panel of major eurozone banks submit rates; the benchmark is compiled and published by EMMI via an appointed administrator.

Bottom line

Euribor is the primary euro-denominated term benchmark reflecting unsecured short-term funding costs among major eurozone banks. Its daily published rates across five maturities are central to pricing many loans and financial contracts and provide a gauge of euro-area liquidity and credit conditions.