Euro Overnight Index Average - Eonia

Like Euribor, Eonia (or the Euro Overnight Index Average) is a reference interest rate for banks.

Eonia is a bit different, since it’s specifically an overnight lending rate, which is calculated by the European Central Bank. It’s a weighted average calculation, which takes into account loans made by 28 specific banks.

Banks often lend to each other overnight when they’ve got extra cash lying around, or if they need extra cash for legal reserve requirements. It’s a win-win for banks to lend to each other, even just for the night. A long-term relationship made of one-night stands.