End of LIBOR
What is LIBOR?
LIBOR is the London Interbank Offering Rate. It is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
This LIBOR rate is determined in London from the 1960s onward. The subprime crisis of the USA in 2008 had reduced the importance of LIBOR in the international financial market. Similarly, in 2012 a scam was exposed regarding the method to determine the LIBOR. So, from December 2021, the Regulatory Body had taken the decision to make the compulsory retirement of LIBIOR.
So, what was the LIBOR scam of 2012? From the 1960s onward, a practice was followed among 16 major banks of London regarding the actual rates they are paying or would expect to pay, for borrowing from other banks. In this survey, average-based, consensus-based different LIBOR interest rates were declared every day in the morning. These LIBOR interest rates were manipulated by these 16 major banks by consensus for their own benefit or advantage. In this scam, Barclays, Bank of America, J . P. Morgan, Citigroup, and UBS were implicated.
To conclude, because of the 2008 subprime crisis in the USA and the LIBOR scam of 2012, LIBOR had lost faith. So, the Regulatory Authority had finally decided to make compulsory retirement of LIBOR by December 2021.