DEFINITION of 'Euro Interbank Offer Rate - EURIBOR'

The rates offered to prime banks on euro interbank term deposits. The EURIBOR is based on average interest rates established by a panel of around 50 European banks (panel banks) that lend and borrow from each other. Loan maturities vary from a week to a year and their rates are considered among the most important in the European money market.

BREAKING DOWN 'Euro Interbank Offer Rate - EURIBOR'

Currently, there are eight different EURIBOR rates and the banks contributing to EURIBOR must meet stringent qualification rules, including that they be in good market standing. They are selected to ensure that the diversity of the euro money market is fairly represented. As a result, the EURIBOR has consistently been regarded as an accurate guide to what is happening in the euro money market.

RELATED TERMS
  1. Panel Bank

    The name given to the group of banks contributing to the Euro ...
  2. Accrual Swap

    A form of discrete time-switch option in which the interest on ...
  3. Euro LIBOR

    London Interbank Offer Rate denominated in euros. This is the ...
  4. Interbank Market

    The financial system and trading of currencies among banks and ...
  5. Euro Deposit

    The equivalent of a money market rate on cash deposits made in ...
  6. Euro Overnight Index Average - ...

    The weighted average of overnight Euro Interbank Offer Rates ...
Related Articles
  1. Personal Finance

    How Negative Interest Rates Affect Mortgages

    Negative interest rates are wrecking havoc on conventional mortgage lending in Europe.
  2. Personal Finance

    How Interest Rates Can Go Negative

    Central banks from Europe to Japan have implemented a negative interest rate policy (NIRP) in order to stimulate economic growth.
  3. Insights

    London Interbank Offered Rate (LIBOR)

    Learn more about this rate which banks use to determine the amount of interest to charge other banks.
  4. Personal Finance

    How Banks Set Interest Rates on Your Loans

    Many factors go into how banks set interest rates for loans. Use this information to negotiate the best possible rate when you're borrowing.
  5. Financial Advisor

    Why Banks Don't Need Your Money to Make Loans

    Contrary to the story told in most economics textbooks, banks don't need your money to make loans, but they do want it to make those loans more profitable.
  6. Insights

    Overnight Rate

    Learn about how banks use this interest rate when lending to other banks.
  7. Investing

    The Foreign Exchange Interbank Market

    Can your forex broker offer you the most competitive pricing? Learn how the market's biggest players affect you.
  8. Personal Finance

    Bank Profitability in the Era of Low Interest Rates

    The "low-for-long" policy on interest rates presents a major challenge to bank profitability.
  9. Small Business

    The LIBOR Scandal

    Barclays and other banks are alleged to have submitted artificially low LIBOR rates between 2007 and 2009.
  10. Personal Finance

    Fed Hike Is A Costly One For Credit Card Borrowers

    Banks have responded to the Federal Reserve's decision to increase interest rates by hiking their prime rates.
RELATED FAQS
  1. Who determines the LIBOR rate?

    Learn about what the LIBOR rate is, how it is determined and calculated, and who determines what the LIBOR rate on a daily ... Read Answer >>
  2. What is the difference between LIBID and LIBOR?

    Both LIBID and LIBOR are rates primarily used by banks in the London interbank market. The London interbank market is a wholesale ... Read Answer >>
  3. What's the difference between the prime rate and the discount rate?

    Learn more about the prime rate and the discount rate and how the Federal Reserve uses these rates in the U.S. economy. Explore ... Read Answer >>
  4. What impact does the Federal Reserve have on a bank's profitability?

    Learn how the Federal Reserve impacts a bank's profitability with its influence on the discount rate, federal funds rate ... Read Answer >>
  5. What should ordinary borrowers know about the prime rate?

    Learn more about how prime rates are used in consumer lending and how consumers may obtain better interest rates at or near ... Read Answer >>
  6. How do commercial banks make money?

    Learn the different ways commercial banks make money, including interest from loan products and banking fees charged to customers. Read Answer >>
Hot Definitions
  1. Dumping

    In international trade, the export by a country or company of a product at a price that is lower in the foreign market than ...
  2. Tender Offer

    An offer to purchase some or all of shareholders' shares in a corporation. The price offered is usually at a premium to the ...
  3. Ponzi Scheme

    A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns ...
  4. Dow Jones Industrial Average - DJIA

    The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange ...
  5. Revolving Credit

    A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is ...
  6. Marginal Utility

    The additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important ...
Trading Center