Euro Interbank Offered Rate (Euribor)

What is the Euro Interbank Offered Rate (Euribor)?

The Euro Interbank Offered Rate, or Euribor, is a benchmark interest rate that reflects the average rate at which major banks in the Eurozone lend unsecured funds to one another. It’s published daily by the European Money Markets Institute (EMMI) and plays a key role in pricing a wide range of euro-denominated financial products, including mortgages, loans, and derivatives. 

Euribor is authorized under the EU Benchmarks Regulation (BMR) and applies to interbank lending across the European Union (EU) and the European Free Trade Association (EFTA).

How Euribor Works

Euribor rates are published each business day at 11:00 a.m. Central European Time (CET), provided the TARGET (Trans-European Automated Real-Time Gross Settlement Express Transfer) system is open. These are spot rates, meaning they apply two business days after the publication date.

The interest rates follow a 360-day year convention and are calculated using a trimmed average: the highest and lowest 15% of valid contributions are excluded, and the remaining values are averaged and rounded to three decimal places.

Since 2019, Euribor has been calculated using a hybrid methodology to meet the requirements of the EU Benchmarks Regulation. Contributions from panel banks follow a three-level waterfall approach:

• Level 1: Real transactions in the unsecured euro money market.
• Level 2: Data derived from transactions (e.g., interpolated or adjusted rates).
• Level 3: Expert judgment when no transaction data is available.

It’s important to note that Euribor is different from €STR (Euro Short-Term Rate), which is the euro area’s overnight risk-free rate based solely on actual transactions. Euribor reflects term structure and interbank credit risk, making it more suitable for longer-dated financial contracts.

History of Euribor

Before the euro was introduced, individual countries used their own interbank rates, such as Paris’ PIBOR, Frankfurt’s FIBOR, and Helsinki’s Helibor. With the launch of the euro in 1999, these national interbank rates were replaced by Euribor for euro-denominated transactions.

Euribor was first published on January 1, 1999, with rates for 15 different maturities. In November 2013, this was streamlined to 8 maturities: 1 and 2 weeks, and 1, 2, 3, 6, 9, and 12 months.

In 2019, the methodology behind Euribor was reformed to comply with the EU Benchmarks Regulation (BMR). The benchmark now follows a hybrid methodology based on real transactions, supplemented by derived data and expert judgment when needed.

Euribor continues to be published and widely used in financial contracts after adopting a reformed methodology that meets regulatory standards.

Contributors to the Euribor

Euribor is calculated from rate submissions provided by a panel of 21 highly active banks in the euro money markets. These institutions are selected based on factors such as trading volume, market presence, and balanced geographic representation across the eurozone.

The composition of the panel is reviewed periodically and may change over time. For the most accurate and up-to-date list of contributing banks, refer to the EMMI website.

The panel includes both Eurozone-based banks and large international institutions with significant operations in the euro-denominated money markets.

The 21-bank panel of contributing banks is given below. The financial institutions handle the largest volume of the eurozone money market transactions.

• Raiffeisen Bank International AG (Austria)
• Belfius (Belgium)
• OP Corporate Bank (Finland)
• BNP Paribas (France)
• HSBC France
• Natixis (France)
• Crédit Agricole (France)
• Société Générale (France)
• Deutsche Bank (Germany)
• DZ Bank (Germany)
• National Bank of Greece (NBG)
• 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)
• Barclays (United Kingdom)

Uses and Importance of Euribor

Euribor rates are widely used to price euro-denominated financial instruments, including forward rate agreements, interest rate swaps, and short-term interest rate futures. They also influence the pricing of retail financial products such as mortgages, savings accounts, and car loans.

Because of this broad application, Euribor is considered systemically important to the stability and functioning of European financial markets. It serves as a key benchmark across both wholesale and consumer finance.

From its launch in 1999 until early 2009, the 1-year Euribor typically ranged between 2% and 6%, peaking at 5.3% in 2000 during the dot-com bubble and again at 5.5% in September 2008 just before the Global Financial Crisis. Rates declined sharply after the crisis, with intermittent increases in 2010 and 2011.

In May 2015, the 1-month Euribor fell below 0% for the first time. Rates across most maturities remained negative for several years due to the European Central Bank’s (ECB’s) accommodative monetary policy.

That trend reversed in 2022, when the ECB began raising interest rates to combat inflation. By mid-2023, many Euribor maturities had turned positive again, with the 12-month rate rising above 4%, reflecting the shift in monetary conditions.

Additional Resources

CFI offers the Capital Markets & Securities Analyst (CMSA®) certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant resources below:

• Applicable Federal Rate (AFR)
• Floating Interest Rate
• Interest Rate Swap
• Federal Funds Rate
• See all capital markets resources
• See all fixed income resources