Scandal-hit Libor to be phased out in 2021

Investing.com – The Libor is to be phased out in 2021 and replaced by a more reliable benchmark rate, the U.K. Financial Conduct Authority said Thursday.The London interbank offered rate sets the daily benchmark rate at which banks lend to each other.The volume of interbank lending has fallen since the 2008 financial crisis amid record low interest rates and massive stimulus programs by central banks.A number of bankers have been convicted of manipulating the rate and multi-billion dollar fines imposed.FCA Chief Executive Andrew Bailey said Libor has become less reliable because of a lack of active underlying markets. “We do not think we will complete the journey to transaction-based benchmarks if markets continue to rely on Libor in its current form,” he said.