As the economy is becoming more and more international, we hear also more and more about the economies of foreign countries. We could go on living without understanding them, however, big foreign economies can also affect the US economy, so it is better to keep an eye on them, at least Europe, China, and Russia.
One term that comes over and over is the EURIBOR. It is more or less a measure of health of the European economy, so you better know what it is.
It is the interest at which financial institutions lend money in the interbank market of the euro. Its value is calculated by the European Banking Federation, the average price of 64 major European banks.
This interest rate applies to transactions between banks in Europe from the offer prices of the loans made between them to 64 major European banks, meaning that the percentage rate paid as a bank when he makes another money .
Euribor is not actually a single type, but a set of them. Financial institutions use different interest rates depending on the term to which they lend money. Therefore one can speak of the Euribor for one week, a month or a year. The Euribor for one year which is normally used as a benchmark for mortgages (sometimes using the IRPH or CECA).
Euribor applies only in the banks of the Member States of the European Union that are part of the Eurozone. The types of local reference, such as Pibor FIBOR Paris or Frankfurt, gathered at the Euribor January 1, 1999. In the case of Spain, the Euribor Mibor replaced following the devolution of power from the Bank of Spain to the European Central Bank.
The value of the Euribor of 12 months experienced a significant decline in the year 2002, with low values during the next three years (compared to previous years). In the last quarter of 2005, its value began a steady climb throughout 2006 it returned to values similar to those taken before the fall. On June 6, 2008 was one of the most spectacular rises to climb three tenths from the previous day’s value and achieve the value of 5417%. The Euribor maximum reached in a year in 2008 was on October 2 that reached up to 5526%. This maximum was exceeded only in December of 1994, which reached values higher than 6.6%. Then the Euribor began to decline following an increase of the credit (and a decline in interest rates from the European Central Bank. The threshold was obtained on March 4, 2009, when decreased to 1993%. The minimum had been achieved since April 2004.