Euribor was set up by the European Banking Federation in 1999 to establish a new interbank reference rate within what is now the 17-country currency union.
Now there is just one rate that trades within a narrow band with a reference rate set by the central bank daily in conjunction with local financial institutions.
Sir Mervyn King, the Governor of the Bank of England, said he welcomed the recommendations, but added that more work would be needed to ensure that in a future crisis Libor remained a reliable reference rate.
In a modest but significant step towards liberalising its currency, China loosened the trading limits for the yuan, allowing prices against the dollar to fluctuate by up to 1% either side of the reference rate set each day by the Chinese central bank.
The yuan hit a high against the U.S. dollar under the current system Monday, after the central bank guided the currency to its strongest level via a reference exchange rate.
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Interest rates on adjustable-rate mortgages, for instance, use the Libor rate as a reference.
Senior loans pay interest at rates that are determined periodically by reference to a base lending rate, primarily LIBOR, plus a premium.
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Addressing MPs on 28 June 2012, the chancellor described the Libor and the European Interbank Offered Rate (Euribor) as "the benchmark reference rates which are fundamental to the workings of the UK, European and international financial markets".
First, the rates on loans paid by many consumers (adjustable-rate mortgages, for example) and companies are set with reference to the money markets.
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In finding Barclays guilty of attempting to manipulate the important Libor borrowing rate, the benchmark rate for bank-to-bank lending, the Financial Services Authority (FSA) made an elliptical reference to this conversation.
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