LIBOR
London Interbank Offered Rate
Definition
The formerly widely used benchmark interest rate at which major global banks lend to one another in the international interbank market. Following the manipulation scandal, most LIBOR settings ceased publication, and the financial industry has transitioned to risk-free rates (RFRs) such as SOFR (US), SONIA (UK), and €STR (EU).
Regulatory Context
The LIBOR scandal, which led to billions in fines and criminal prosecutions, was a catalyst for the EU Benchmarks Regulation and the global benchmark reform programme. The FCA oversaw LIBOR's wind-down, with the last USD LIBOR settings ceasing in June 2023.