Euribor is short for Euro Inter-bank Offered Rate. The Euribor rates are based on the interest rates at which a panel of European banks borrow funds from one another. In the calculation, the highest and lowest 15% of all the quotes collected are eliminated. The remaining rates will be averaged and rounded to three decimal places. Due to a change of policy by the Euribor EBF organisation, Euribor rates are only available to the general public with a 24 hour delay. From March 3rd 2014, no-one is allowed to publish real time Euribor data. Euribor is determined and published at about 11:00 am, Central European Time each day.
When Euribor is mentioned it is often referred to as THE Euribor. There are 8 different Euribor rates, all with different maturities 1 and 2 weeks, 1, 2, 3, 6, 9 and 12 months). Up to November 1st 2013, there were 15 maturities. Euribor was first published on 30 December 1998 (value 4 January 1999). 1 January 1999 was the day that the Euro as a currency was introduced.
Because 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 the level of the rates as well. 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 and saving accounts.
The panel banks consist of 23 Eurozone banks and two international banks. These are the banks with the highest volume of business in the euro zone money markets. There are no Irish banks represented on the panel.
LIBOR is the average inter-bank interest rate at which a selection of banks on the London money market are prepared to lend to one another. Just like Euribor, LIBOR comes in different maturities. The main difference is that LIBOR rates come in different currencies whereas the Euribor only applies to Euro currency rates.