Tuesday, March 15, 2016

The new euribor enter into force within four months – EntornoInteligente

Expand / The calculation of the new euribor be made on actual transactions between banks.

The European Institute for Monetary Market (EMMI) began work on a new euribor already in 2014 with the aim of improving the calculations for fixing this index in Spain, it determines the price of the vast majority of mortgages. This new module if no date changes, should come into force from next July 4, he recalls today the newspaper El Mundo.

The euribor change began to take shape after the scandals by manipulation of the index that affected entities such as Deutsche Bank, Societe Generale and RBS. The EMMI aimed at finding a formula to give more security regarding the calculation of the indicator.

The chosen solution was to calculate the euribor based on actual transactions in which banks lend money. Currently, however, the Euribor is calculated according to the estimates of these entities on the prices applied in transactions that could perform.

However, the forthcoming entry into force of the new euribor, which some define as euribor plus, is not without controversy, mainly because it takes effect just when this indicator is in negative territory, which has raised some excitement about the fact that some banks are forced to pay their customers by having mortgage. This would happen in cases where the differential applied to the loan does not cover the negative difference euribor.

Last February, for the first time, the Euribor stood at negative, at -0.008%. The vast majority of existing mortgages in Spain would not enter negative territory with these numbers, because the spreads applied are higher. However, and more after the new battery of measures launched by the ECB, forecasts suggest that this indicator could fall further.

Banks and their employers remember that the decision to change the Euribor was taken long ago and that the goal is to improve the calculation of this indicator. However, they recognize that it can not be ruled out, at least at first, the measure impact on an increase in the volatility of euribor.

The new euribor enter into force within four months

Information Expansión

http://entornointeligente.com/articulo/8069980/El-nuevo-euribor-entrara-en-vigor-dentro-de-cuatro-meses

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