EURIBOR

Mortgages to review the data in January achieved the second highest cut since the Euribor was used as an indicator mortgage in January 1999.

This reference recorded in January, the second drop in its history interannual, about 188 basis points (one hundred basis points equals 1%). This is their biggest fall since November 2001 record, then dropped 199 basis points.

The bearish trend in the Euribor, which began last autumn, has accelerated with the start of the year in an environment marked by the sharp economic decline, falling interest rates, the ECB will cut in half this month, up to 2 % - and prospects for further lowering of the official price of money in the euro zone.

The Euribor mortgage as an indicator, the monthly average of the daily trading Euribor a year, will be this month at 2.62%. It is their lowest level since October 2005, then in a 2414% - according to provisional data which could vary in the three hundredth sessions remaining. The Bank of Spain official figure published next week.

Loans to review this information with a notice of the biggest cuts of this decade. The holder of a mortgage-half the amount of 135,202 euros, a 25-year term that pays a spread of 0.5%, according to the National Statistics Institute (INE), will see their monthly fee is reduced by 140, 61 euros. Go to pay 790.22 euros to pay 649.61 euros. This is a decrease of 17.7%. This will mean that the holder of the loan would save each year, 1687.32 euros, an amount equivalent to just over two existing shares.

Given the sharp fall in the Euribor premiere this year, banks are expected to be forced to revise its forecasts for the year-end. More than a dozen national and international banks and savings expected that this indicator fell later this year to levels of 2.5%.

Low tension

Euribor falls not only have been produced by the drop in official interest rates in the euro, from 4.25% in October to 2% at present, and future expectations of decline in the price of money, but are shrinking because of the interbank market tensions. Historically, the spread between the twelve-month Euribor and EONIA swap one year, which measures expectations for rates in this period was less than 0.1 percentage points. This means that if the expectations are now at 1.2%, the EURIBOR twelve months should be 1.3%.

But since the start of the crisis, the spread between Euribor and EONIA swap has soared. Currently is still at 1.05 points, but has come to be at 2.39 points.

This reduction of the spread is certainly a sign of normalization of the market. So is that financial institutions and businesses have been able to return to the capital market to issue debt and raise funds. And while the prices they are paying for such financing are much more expensive than a year and half ago, the mere fact of being able to deliver is a clear improvement compared with the second half of 2008.

But there is still an important unresolved: banks still lend on the interbank market. According to the latest data, the entities of the euro kept almost 200,000 million euros in the ECB's deposit facility, paid a special account that banks should only be used on time.

And with the lowered expectations of rate stabilized at slightly more than 1%, the Euribor future crashes must reach the standards of the interbank market.