What Is the Euro Interbank Offer Rate (Euribor)?

Euribor, or the Euro Interbank Offer Rate, is a reference rate that is constructed from the average interest rate at which eurozone banks offer unsecured short-term lending on the inter-bank market. The maturities on loans used to calculate Euribor often range from one week to one year.

This is the benchmark rate with which banks lend or borrow excess reserves from one another over short periods of time, from one week to 12 months. These short-term loans are often structured as repurchase agreements (repos) and are intended to maintain bank liquidity and to make sure that excess cash is able to generate an interest return rather than sit idle.

Understanding the Euro Interbank Offer Rate (Euribor)

The Euro Interbank Offer Rate (Euribor) in fact refers to a set of five money market rates corresponding to different maturities: the one-week, one-month, three-month, six-month, and twelve-month rates. These rates, which are updated daily, represent the average interest rate that eurozone banks charge each other for uncollateralized loans.

Euribor rates are an important benchmark for a range of euro-denominated financial products, including mortgages, savings accounts, car loans, and various derivatives securities. Euribor's role in the eurozone is analogous to LIBOR in Britain and the United States.

Who Contributes to the Euribor Rate?

There are 19 panel banks that contribute to Euribor. These are the financial institutions that handle the largest volume of eurozone money market transactions. As of May 2023, these panel banks include:

• Raiffeisen Bank International AG (Austria)
• Belfius (Belgium)
• Barclays (Britain)
• BNP Paribas (France)
• Crédit Agricole s.a. (France)
• HSBC France (France)
• Natixis / BPCE (France)
• Société Générale (France)
• Deutsche Bank (Germany)
• DZ Bank (Germany)
• Intesa Sanpaolo (Italy)
• UniCredit (Italy)
• Banque et Caisse d'Épargne de l'État (Luxembourg)
• ING Bank (Netherlands)
• Caixa Geral De Depósitos (Portugal)
• Banco Bilbao Vizcaya Argentaria (Spain)
• Banco Santander (Spain)
• CECABANK (Spain)
• CaixaBank (Spain)

The Difference Between Euribor and Eonia

Eonia, or the Euro Overnight Index Average, is also 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.

The panel banks that contribute to the rates are also different: only 19 banks contribute to Euribor, instead of 28. Finally, Euribor is calculated by Global Rate Set Systems Ltd., not the ECB.