LIBOR
a.k.a. London Interbank Offered Rate
The London Interbank Offered Rate: a once-dominant benchmark for short-term borrowing between banks, phased out after a rigging scandal.
For decades, LIBOR set the price of trillions of dollars of loans and derivatives. It was based on banks' own estimates of what they would pay to borrow, not on actual trades.
After revelations around 2012 that traders had manipulated submissions, regulators fined banks heavily and moved to replace it. Most LIBOR settings ended in 2021, and the last US dollar settings in 2023. Replacements are based on real transactions, such as SOFR in the US and SONIA in the UK.
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