Santa Clarita Living

Euribor rate calculated in a manner inappropriate?

by admin on 03/11/08 at 12:04 pm

Euribor is the rate at which banks exchange between their interbank deposits denominated in Euros.
But also an immediate effect on variable rate mortgages.
It is a very important parameter for the life of European citizens is not calculated on the basis of data taken directly from the market and procedures to integrate it, but on the basis of voluntary contributions of those banks.
Alfonso Scarano LaVoce.info to express doubt that might have stabilized the system for calculating an inadequate and inefficient. See more

… Because the one who signs the mortgage, through the Euribor rate is subject to pay a cost that is not in relation to its risk, but the risk of credit between banks, for the whole period of existence of the loan?
The method of calculation which is prepared with the Euribor rate could lead to inefficiencies or even a risk of manipulation by the banking system?
This leaves more perplexing that the procedure is that the data Euribor is calculated as voluntary contribution and not as an integrated system for calculating its underlying market. A very important parameter for the life of European citizens is not calculated on the basis of objective data taken directly from the market and procedures to integrate it, but on the basis of voluntary contributions, possibly encouraged by a phone call and potentially subject to a risk of intervention discretion….
This is legitimate doubt that might have established a procedure for calculating inadequate and inefficient, offering the public a user has been less significant than it should be. And what is more detrimental to those who use the bank loans.

LaVoce.info therefore proposed

Because of its social significance, it would be useful to promote a series of independent studies designed to ascertain the true significance of historic Euribor given over the total of transactions on the interbank system.