It is now just over three and half years since Andrew Bailey, then head of the UK Financial Conduct Authority (FCA), effectively set the London interbank offered rate (Libor) on a path of terminal decline.
In the wake of a rigging scandal that irreparably tarnished the benchmark’s reputation — and despite methodology reforms — in July 2017, Mr Bailey announced that he did not believe continuing to use Libor was sustainable or desirable; the underlying markets it was measuring were no longer sufficiently active to calculate a representative rate. As a result, from the end of 2021, the FCA would no longer compel Libor panel banks to submit data, and market participants should use alternative rates.
