Euribor - the promise at the heart of the Spanish Bank deception (+Start your claim)

by Legal editorial team
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Euribor is short for Euro Interbank Offered Rate. Euribor and LIBOR are comparable base rates. Euribor is the average interbank interest rate at which European banks are prepared to lend to one another.

LIBOR is the average interbank interest rate at which a selection of banks on the London money market are prepared to lend to one another.

Mortgage and loan interest rates are specified in terms such as '2 points above Euribor'.

It is that phrase that has disguised the deception that is at the heart of the Spanish Bank scandal, and your claim for a return of overpayments made for years.

Both LIBOR and Euribor come in different maturities. The main difference is that LIBOR rates come in different currencies.

The Euribor rates are based on the interest rates at which a panel of European banks borrow funds from each other.

In the calculation, the highest and lowest 15% of all the quotes collected are eliminated.

The remaining rates are averaged and rounded to three decimal places.

Euribor is set at 11:00 am each day, Central European Time.

Euribor is often referred to as THE Euribor, implying that there is only one single Euribor interest rate, which is not correct.

There are currently 8 different Euribor rates, all with different maturities. At one time there were 15 different rates!

Euribor was first published on 30 December 1998 just ahead of 1 January 1999 when the Euro as a currency was introduced.

Before Euribor many domestic reference rates like PIBOR (France) and Fibor (Germany) existed.

Since the Euribor rates are based upon agreements between many European banks, the level of the rates is determined by supply and demand in the first place.

However there are some external factors, like economic growth and inflation which influence rates.

The Euribor rates are important because these rates provide the basis for the price or interest rate of all kinds of financial products, like interest rate swaps, interest rate futures, saving accounts – and of course ‘tracker’ mortgages.

The panel banks are the banks with the highest volume of business in the euro zone money markets and with a first class credit standing, high ethical standards and an excellent reputation.

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