FCA Puts Libor on Notice for 2021 Phase-Out

UK regulator puts scandal-hit benchmark on notice as industry examines alternative rates

canary-wharf-skyline-2-london-uk-oct-2012
Libor has been tainted by scandals, but despite attempts at reform, the FCA believes it is not fit for purpose in its current guise.

The London Interbank Offered Rate (Libor) underpins a vast amount of financial instruments, from derivatives contracts through to mortgages and consumer loans. It is designed to reflect the average rate at which banks can obtain short-term loans from one another, based on submissions from a panel of submitters, and acts as a bellwether for the health of the interbank market.

However, the UK Financial Conduct Authority (FCA), which assumed responsibility for supervising Libor in 2013, has been

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