Good morning to all / as
If there is an economic index of particular interest to us all, that is the EURIBOR. Mainly because the vast majority of our mortgages are references to this index. All Euribor plus differential pay for that we have set the Bank.
But is the same thing euribor the official interest rate of money set by the European Central Bank?, Do we know how to set the Euribor?, Do we know what makes up or down the Euribor? .
First, we must make it clear that is NOT the same Euribor the official interest rate of money, even if they are related.
The official interest rate money is the price at which the Bank European Central lends money to banks, the Euribor is the average of the interest that banks charge each other for lending money to each other. The system works very simply: European Central Bank lends money to banks and then that same money the banks lend it to each other . What the European Central Bank charges banks, is the official cash rate, currently at 1%, and the average of what banks charge to lend money to each other, is the Euribor.
Second, the Euribor is calculated by averaging the interest rates of financial institutions for Europe's largest deposits Interbank . It is calculated by the simple average of daily interest rates cross the operations within one year on the market of interbank deposits among financial institutions more turnover. That is the reason that the Euribor daily change in value.
Third, seems reasonable to assume that if banks have more difficulties in receiving money from the European Central Bank, the Euribor rises, as there will be less money to lend to each other and that will raise money more expensive. It seems reasonable that if there is a deep distrust between banks, the Euribor up because the banks that lend money want to charge a higher interest as a further guarantee of the loan. So when in September 2008 mistrust in the financial system was complete and no one trusted anyone, the euribor marked the historic monthly average 5.384% .
Fortunately, today, everything is much quieter.
El euribor ended September 2010 with an average of 1.42%. Take six months and is expected to rise between now and year end is around 1.5%.
Regards,
José Antonio
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