<P><STRONG><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt">EURIBOR vs LIBOR</SPAN></STRONG></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움"> </SPAN><IMG style="FLOAT: none; CLEAR: none" class=txc-image src="http://thimg.todayhumor.co.kr/upfile/201210/91730d4c672d591f5c8dea1ebd0a4a01.jpg"></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움"><SPAN style="FONT-SIZE: 8pt"> </SPAN><STRONG><SPAN style="FONT-SIZE: 8pt">Libor and Euribor are used as benchmarks for interest rates</SPAN></STRONG></SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움"><SPAN style="FONT-SIZE: 8pt">      </SPAN><SPAN style="FONT-SIZE: 8pt"> (The Difference Between Euribor & Libor </SPAN></SPAN><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 8pt" class="byline trigger" data-action="showModal">By Richard Friedkin)</SPAN></P> <P><SPAN class="byline trigger" data-action="showModal"></SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> </SPAN></P> <P><SPAN class="byline trigger" data-action="showModal"></SPAN><STRONG><SPAN style="FONT-FAMILY: Dotum,돋움">LIBOR</SPAN></STRONG><SPAN style="FONT-FAMILY: Dotum,돋움"> represents the average </SPAN><A title="Annual Percentage Rate vs Interest Rate" href="http://www.diffen.com/difference/Annual_Percentage_Rate_vs_Interest_Rate"><FONT color=#0066cc><SPAN style="FONT-FAMILY: Dotum,돋움; COLOR: #000">interest rate</SPAN></FONT></A><SPAN style="FONT-FAMILY: Dotum,돋움"> that leading banks in London estimate they would be charged if borrowing from other banks. </SPAN><B><SPAN style="FONT-FAMILY: Dotum,돋움">EURIBOR</SPAN></B><SPAN style="FONT-FAMILY: Dotum,돋움"> is a similar reference rate for Euro zone </SPAN><A title="Bank vs Credit Union" href="http://www.diffen.com/difference/Bank_vs_Credit_Union"><FONT color=#0066cc><SPAN style="FONT-FAMILY: Dotum,돋움; COLOR: #000">banks</SPAN></FONT></A><SPAN style="FONT-FAMILY: Dotum,돋움">. While Euribor is only available in Euros, Libor is available in 10 different currencies. There isn't just one Libor or Euribor rate on any given date; they are sets of indexes for different maturities.</SPAN></P> <P> </P> <P style="TEXT-ALIGN: left"><IMG style="FLOAT: none; CLEAR: none" class=txc-image src="http://thimg.todayhumor.co.kr/upfile/201210/1ef2c83181a3da3296a69ce11cb4203c.jpg"></P> <P><SPAN class=mw-headline><STRONG></STRONG></SPAN> </P> <P><SPAN class=mw-headline><STRONG><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt">What is it?</SPAN></STRONG></SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">LIBOR stands for </SPAN><B><SPAN style="FONT-FAMILY: Dotum,돋움">London Interbank Offered Rate</SPAN></B><SPAN style="FONT-FAMILY: Dotum,돋움">. It is the average rate at which a selection of London banks are prepared to lend to one another. The official definition is: </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움">The rate at which an </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD1 class=IL_AD>individual</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> Contributor Panel bank could borrow funds, were it to do so by asking for and then accepting inter-bank offers in reasonable market size, just prior to 11.00 London time. </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움">Libor is actually not just one rate but a set of indexes. There are </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD3 class=IL_AD>separate</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> Libor rates reported for 15 different maturities and for 10 </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD11 class=IL_AD>currencies</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움">. </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움">The concept for the Euribor (</SPAN><B><SPAN style="FONT-FAMILY: Dotum,돋움">Euro Interbank Offered Rate</SPAN></B><SPAN style="FONT-FAMILY: Dotum,돋움">) is the same as the Libor but it is based upon estimates from leading European banks. Euribor is the average inter-bank interest rate that European banks are prepared to lend to one another. It is compiled by the European Banking Federation. The Euribor is also reported for 15 different maturities but only for one currency: the Euro.</SPAN></P> <P> </P> <P><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt" class=mw-headline><STRONG>How are Libor and Euribor calculated?</STRONG></SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">Libor is calculated and published by Thomson Reuters on behalf of the British Bankers' Association (BBA). Each day that markets are open, the BBA </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD10 class=IL_AD>surveys</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> a panel of banks (18 major global banks for the USD Libor), asking them to estimate the interest rate they would have to pay to borrow money from other banks. The 4 highest and 4 lowest responses are discarded, and an average is calculated based on the middle 10. This average is then reported at 11:30AM as the Libor rate for that day.</SPAN></P> <P> </P> <P><EMBED height=315 type=application/x-shockwave-flash width=560 src=https://www.youtube.com/v/wBCowBiXV7A?version=3&hl=ko_KR wmode="transparent" allowfullscreen="true" allowscriptaccess="always"></EMBED></P> <P> </P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">Euribor is calculated in a similar </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD9 class=IL_AD>fashion</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> but the panel of banks submitting the interest rate estimates is much larger and from all over Europe. As of 12 October 2012, this panel consists of 44 banks with the highest volume of </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD2 class=IL_AD>business</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> in the euro zone money markets. The highest and lowest 15% of the estimates are discarded from the calculation, and the remaining rates are averaged and rounded to three decimal places. Euribor is also calculated and published by Reuters.</SPAN></P> <P> </P> <P><SPAN class=mw-headline><STRONG><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt">Maturities</SPAN></STRONG></SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">Maturities are lending periods, i.e. how long an amount of money is lent for. Both the Euribor and the Libor calculate different rates for each maturity they analyze. </SPAN></P> <DIV style="BORDER-BOTTOM: #cbcbcb 1px dashed; BORDER-LEFT: #cbcbcb 1px dashed; PADDING-BOTTOM: 10px; BACKGROUND-COLOR: #ffffff; PADDING-LEFT: 10px; PADDING-RIGHT: 10px; BORDER-TOP: #cbcbcb 1px dashed; BORDER-RIGHT: #cbcbcb 1px dashed; PADDING-TOP: 10px" class=txc-textbox> <P><SPAN style="FONT-FAMILY: Dotum,돋움">The Euribor has 15 different maturities: 1, 2 and 3 weeks, and 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 months.</SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">The Libor also has 15 different maturities. These are 1 day, 1 week, 2 weeks, and 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 months. </SPAN></P></DIV> <P><SPAN style="FONT-FAMILY: Dotum,돋움">Unlike the Euribor, it does not have a 3 week rate, but it does have an overnight rate, which the Euribor does not. In the United States, many private contracts reference the three-month dollar Libor.</SPAN></P> <P> </P> <P><SPAN class=mw-headline><STRONG><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt">Currencies</SPAN></STRONG></SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">Euribor is only available for the Euro.</SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">Libor is available for 10 different currencies: Australian dollar, British pound sterling, Canadian dollar, Danish krone, Euro, Japanese Yen, New Zealand dollar, </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD7 class=IL_AD>Swiss franc</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> and US dollar. The Libor is also available for the Euro, but is mainly for continuity purposes for contracts that were in place before the EMU. Otherwise, the Euribor is more widely used.</SPAN></P> <P> </P> <P><SPAN class=mw-headline><STRONG><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt">Libor and Euribor Rates</SPAN></STRONG></SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">Euribor was first published on December 30th 1998. Libor officially started on January 1st 1986, but it had a trial period in December 1984. </SPAN></P> <DIV class="thumb tright"> <DIV style="WIDTH: 352px" class=thumbinner><A class=internal title="Euribor rates for 12m (red), 3m (blue) and 1w (green) between years 1998 and 2011." href="http://www.diffen.com/difference/Image:Euribor-chart.png"><IMG class=thumbimage alt="Euribor rates for 12m (red), 3m (blue) and 1w (green) between years 1998 and 2011." src="http://static.diffen.com/uploadz/d/d3/Euribor-chart.png" width=350 longDesc="/difference/Image:Euribor-chart.png" height=175></A> <DIV class=thumbcaption> <DIV style="FLOAT: right" class=magnify><A class=internal title=Enlarge href="http://www.diffen.com/difference/Image:Euribor-chart.png"><IMG alt="" src="http://www.diffen.com/difference/skins/common/images/magnify-clip.png" width=15 height=11></A></DIV><SPAN style="FONT-FAMILY: Dotum,돋움">Euribor rates for 12m (red), 3m (blue) and 1w (green) between years 1998 and 2011.</SPAN></DIV></DIV></DIV> <P> </P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">On 29th August 2012, the Euribor had the following rates: 0.092 for 1 week, 0.122 for 1 month, 0.288 for 3 months, 0.549 for 6 months and 0.819 for 12 months.</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움">On the same day the Euro Libor had the following rates: 0.02143 for overnight, 0.035 for 1 week, 0.5186 for 2 weeks, 0.07357 for 1 month, 0.17286 for 3 months, 0.45143 for 6 months, and 0.76143 for 12 months.</SPAN></P><A name=Daily_Rates></A> <H3><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt" class=mw-headline>Daily Rates</SPAN></H3> <P><SPAN style="FONT-FAMILY: Dotum,돋움">The daily rates can be found here:</SPAN></P> <UL> <LI><A class="external text" title=http://www.global-rates.com/interest-rates/libor/libor.aspx href="http://www.global-rates.com/interest-rates/libor/libor.aspx" rel=nofollow target=_blank><U><FONT color=#0066cc><SPAN style="FONT-FAMILY: Dotum,돋움">Libor Rates in all currencies, for all maturities</SPAN></FONT></U></A></LI> <LI><A class="external text" title=http://www.global-rates.com/interest-rates/euribor/euribor.aspx href="http://www.global-rates.com/interest-rates/euribor/euribor.aspx" rel=nofollow target=_blank><U><FONT color=#0066cc><SPAN style="FONT-FAMILY: Dotum,돋움">Euribor rates for all maturities</SPAN></FONT></U></A></LI></UL> <P><SPAN class=mw-headline><STRONG><SPAN style="FONT-FAMILY: Dotum,돋움; FONT-SIZE: 12pt">Applications in Finance</SPAN></STRONG></SPAN></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">The Libor is used as a benchmark against which </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD12 class=IL_AD>financial</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> instruments that are denominated in Euros are measured. It is not used to measure US transactions that are based on dollars. </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움">The Libor is used as a reference rate by many financial instruments, including rate fixings instruments (such as interest rate swaps), </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD5 class=IL_AD>commercial</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> field </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD8 class=IL_AD>products</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> (such as term </SPAN><A title="Loan vs Mortgage" href="http://www.diffen.com/difference/Loan_vs_Mortgage"><FONT color=#0066cc><SPAN style="FONT-FAMILY: Dotum,돋움; COLOR: #000">loans</SPAN></FONT></A><SPAN style="FONT-FAMILY: Dotum,돋움"><SPAN style="COLOR: #000"> </SPAN>and variable rate mortgages) and </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD6 class=IL_AD>hybrid</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> products (such as collateralized </SPAN><SPAN style="FONT-FAMILY: Dotum,돋움" id=IL_AD4 class=IL_AD>mortgage</SPAN><SPAN style="FONT-FAMILY: Dotum,돋움"> obligations). In the US, 60% of prime adjustable rate mortgages and almost all subprime mortgages are indexed to the Libor. For example, a variable rate </SPAN><A title="Loan vs Mortgage" href="http://www.diffen.com/difference/Loan_vs_Mortgage"><FONT color=#0066cc><SPAN style="FONT-FAMILY: Dotum,돋움; COLOR: #000">mortgage</SPAN></FONT></A><SPAN style="FONT-FAMILY: Dotum,돋움"> may be based on the six-month Libor rate plus 3%.</SPAN></P> <P> </P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">출처: </SPAN><a target="_blank" href="http://www.diffen.com/difference/EURIBOR_vs_LIBOR"><SPAN style="FONT-FAMILY: Dotum,돋움">http://www.diffen.com/difference/EURIBOR_vs_LIBOR</SPAN></A></P> <P><SPAN style="FONT-FAMILY: Dotum,돋움">그림: </SPAN><a target="_blank" href="http://www.ehow.com/info_8737468_difference-between-euribor-libor.html"><SPAN style="FONT-FAMILY: Dotum,돋움">http://www.ehow.com/info_8737468_difference-between-euribor-libor.html</SPAN></A></P>