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Euribor rates are just short end bank-to-bank reference pts. The interbank markets are mostly technically driven on the short end. Central bank policies (eg res
by jnordwick 7y ago
Euribor rates are just short end bank-to-bank reference pts. The interbank markets are mostly technically driven on the short end. Central bank policies (eg reserve requirements) play the largest role.
And can you show me euribor-based long-term loan where the interest rate is negative? For the most part, banks have no need to loan unless compelled, so maybe where is some policy forcing them to? I would call those extremely strange technical factors.
- beefield 7y ago> And can you show me euribor-based longe-term loan where the interest rate is negative? My old mortgage would have become technically negative a couple of years ago, but I was forced to prepay it due to selling my apartment before the rates went that far down. As I said, my understanding is that my bank would have refused to honor our contract, though, and insist there is a zero floor in my mortgage even if nothing like that was agreed when I took the loan, so in that sense you are right.