What is the difference between euribor and libor

Libor London Interbank Offered Rate is generally the same thing as Euribor — a set of reference interest rates based on the interbank lending market — but with two very important differences. Firstly, there is a difference in geography, or in composition of the panel of banks which report their interest rate quotes for the reference rate calculation. For Euribor they are banks trading in the Eurozone, while for Libor they are banks trading in London.

Of course, given the globalization and concentration of the financial industry, many large banks have offices and trading desks in multiple countries and they are represented in both Libor and Euribor panels for example Deutsche Bank, Societe Generale, Barclays or Citibank, to name just a few. EUR Libor rates Libor rates for the Euro currency are not exactly the same thing as Euribor, although their values are usually very similar.

The first of the above-mentioned differences composition of the panel of banks still holds. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

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Partner Links. Related Articles. Interest Rates Federal Funds Rate vs. Investopedia is part of the Dotdash publishing family. Euribor and Eonia are critically important interest rate benchmarks for the eurozone. The race is on to reform Euribor so that it complies before the BMR authorisation deadline of 1 January No attempt will be made to reform Eonia, however, and transition to a new overnight reference rate will be required.

European authorities have established an industry working group tasked with recommending alternative euro risk free rates and a plan for adopting them.

While regulators are supportive of the Euribor reform process, its success is not guaranteed. 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, saving accounts and mortgages. The panel banks are the banks with the highest volume of business in the euro zone money markets. The panel consists of banks with a first class credit standing, high ethical standards and an excellent reputation.

For the full list of all the panel banks, click here.