190 basis point above Euribor

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Hello,

I need to know please the meaning of "190 basis point above Euribor". What "above" particularly mean?
Indeed, the implied interest rate between the Dec 09 and the Dec 12 EUA price has increased from
+190 basis points above Euribor (around a 4.1% interest rate per annum) at the beginning of February.

Thanks,
 
  • MuttQuad

    Senior Member
    English - AmE
    A basis point, in he financial industry, is one one-hundreth of a percentage point. Thus, an increase of 190 basis points equals an increase of 0.19 per cent.

    Above here means over. Certain rates are set as being a certain number of basis points above (higher than) Euribor (The Euro Interbank Offered Rate) or Libor (The London Interbank Offered Rate). Supposedly these "interbank" rates are what banks offer to other banks who wish to borrow money on an overnight loan.
     

    Edinburgher

    Senior Member
    German/English bilingual
    It's always worth quoting complete sentences.

    The original [SOURCE: April 2009 newsletter "Tendances Carbone" of the Caisse des Dépôts on the European Carbon Market] says "... has increased from X to Y."
    X = "+190 basis points above Euribor (around a 4.1% interest rate per annum) at the beginning of February"
    Y = "+500 basis points by the middle of March (around a 7% interest rate per annum)"

    Now it becomes clearer: The article authors have been tracking the implied interest rate (IIR) relative to a benchmark, namely Euribor, and specifically the focus is on how the difference between IIR and Euribor has increased during the period from the beginning of February to the middle of March. It has increased from 190 basis points (bips) above Euribor to 500 bips above Euribor.

    In early Feb Euribor was about 2.2% and IIR was 190 bips higher (i.e. 1.9% higher) at about 4.1%pa.
    In mid-March Euribor was about 2.0% and IIR was 500 bips higher (i.e. 5% higher) at bout 7%pa.
     
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