Market Flash - Beware of Negative Euribor Rates

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May 21, 2015

In order to stimulate growth and encourage banks to increase their lending activity, the ECB has reduced its deposit rate to below zero. In reaction, the Euribor rate has also fallen below zero. This sequence of events has created unforeseen consequences for participants trading loans in the European secondary market when calculating the compensation for delayed settlement based on the Euribor rate.

In this Market Flash, Richards Kibbe & Orbe partners Matthew Hughes and Andrew Martin discuss the effects of negative Euribor rates.

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