A group of 57 banks, 47 of which are in the euro zone, will set up a Euribor index in January to set the reference short-term interest rate between banks in the EU single currency zone, the European banking federation said yesterday.

The index will be used in several euro zone countries as the reference rate for money markets, replacing national indices, particularly for variable-rate loans such as home mortgages.

Ireland, France, Germany, Belgium, Italy, the Netherlands, Austria and Finland have already decided to replace their existing indices with Euribor, the federation said.