What Is the Euro Overnight Index Average?

The Euro Overnight Index Average (Eonia) is the effective overnight reference rate for the euro.

How the Euro Overnight Index Average (Eonia) Works

Eonia is a daily reference rate that expresses the weighted average of unsecured overnight interbank lending in the European Union and the European Free Trade Association (EFTA). It is calculated by the European Central Bank (ECB) based on the loans made by 28 panel banks. 

Eonia is similar to Euribor, another euro benchmark rate based on interbank lending. Both benchmarks are offered by the European Money Markets Institute (EMMI). The main difference between Eonia and Euribor is the maturities of the loans upon which they are based. Eonia is an overnight rate, while Euribor is actually eight rates based on loans with maturities varying from one week to 12 months. The panel banks that contribute to the rates are also different: only 20 banks contribute to Euribor. Finally, Euribor is calculated by Global Rate Set Systems Ltd., not the ECB.