What is the Euribor?
This article about "What is the Euribor" was written long ago and despite being a formal definition leaves plenty of gaps, so to the maturity of blog users have expanded information which I think is just put here comment from one of our users and which is far more telling that the original definition that put him in his day (I leave at the end)
If someone tells you sure that you know that the Euribor will go up or go down to such a height that is fooling you this, or is waiting for you to do something on the basis of information that gives you (you to sign a mortgage or take out insurance types of off-time).
The Euribor is composed in part of the official rate of money and a risk premium applied by banks to lend money among themselves. Ie 4% of the current official rate of 0.595 + money that is the risk premium applied by the banks. This premium has nothing to do with the difference that then applied to your mortgage.
If banks have limited liquidity or mistrust exists between them, the risk premium increases and the differential to lend money between them increases. When there is trust (eg after posting results and see that all are gaining an embarrassing montonazo pasta) confidence increases and the differential is declining, what is happening now. Without lowering official rates the ECB itself (still at 4 months now) the Euribor has fallen from 4782 until 4595 yesterday, because banks earn less irrigation lend money among themselves. If an impasse now appears likely the atmosphere between the banks and raise caldearía the Euribor, but if results continue to emerge with profit increases of 2 digits, it is likely that the premium will continue to reduce some time. We are in a post-shock, bringing with increasing confidence, banks are reducing the risk premium between them.
The other component is the official price of money. This will mark the ECB to contain inflation or revive the economy. With high rates, money income alone, or that those with money have no need to move it, and that leaves us no expensive, so there are operations that are no longer done because the interests are eaten part or full benefits. This cools the economy in general and lapses demand for products and services, which are challenging to lower demand and prices contained inflation.
With low rates, those with money, are forced to move because their interests may fall below inflation and thus lost heritage, and we do not have, gives us ability to cope with major operations at the cost of debt. This increases the activity and reactive demand which will produce price increases, the CPI rises etc ...
The rise of an asset such as gasoline can make all the products, generating inflation despite its high rates. But a brutal technological innovation (such as the invention of a cheap alternative to gasoline) could reduce the costs of logistics and reduce inflation. Unfortunately for this to happen to invest in R & D, but here in Spain, where we have had growth and liquidity, rather than invest in improving knowledge, we have improved billet.
That is benefiting someone tell you that the Euribor will ask him to go down if the dollar recovers and gasoline at historic highs (but softened by the low dollar) and inflation shoot Trichet remove the sword and we cut the head everyone.
And similarly, if someone tells you that the Euribor will rise infinitely, ask what would happen if there is another major attack, and to revive the global economy put the rates as low in recent years, or if there is a technological breakthrough brutal (equivalent to the invention of the wheel) to reduce costs as crude and allows growth without inflation.
In short that nobody knows, nobody knows what will happen, nor the director of your office, this is a mindundi PM you going to count anything for you to sign.
In Catalan there is a phrase that says "If Vols should be Servite, faiths-te your Mateixos the llit" that comes to saying that if you want to be well-served mime make your bed, so you know, you do not think anybody , Look, read, learn and draw your own conclusions.
And here the original article:
Euribor is an acronym for "Eur ope I nter b ank ffered O R ate", or the European interbank offered rate. It is the interest rate applied to transactions between banks in Europe, meaning that the percentage rate you pay as a bank when another lets you money.
It is calculated by averaging the interest rates of financial institutions most important in Europe for interbank deposits, is used as reference in the rates of mortgages in the countries that belong to the European Monetary Union. His calculation is performed by the simple average of the daily interest rates of operations to cross within a year on the market for interbank deposits, among the 64 financial institutions with greater turnover. Therefore the EURIBOR varies every day, in the case of mortgages are usually reviewed every 6 months or one year (in terms of the contract).
# 1, jordi
My comment is: Will a question asubir more interest rate mortgages in the coming years? thanks