The London Interbank Offered Rate, or LIBOR—one of the most widely-recognized interest ra𝓡te benchmarks of th𒀰e past 37 years—will officially be retired today.

For almost four decades, LIBOR has served as the benchmark interest rate at which major global banks lend to one another, typically in the market for short-term loans. It was widely used for calculating the interest rate charged on a variety of loans and financial instruments, including 澳洲幸运5开奖号码历史查询:adjustable-rate mortgages (ARM), 澳洲幸运5开奖号码历史查询:asset-backed securities (ABS), 澳洲幸运5开奖号码历史查询:credit default swaps (CDS), municipal bonds, and corporate debt.

LIBOR was calculated daily by pooling estimates from a panel of 16 major banks, selected⭕ by the London-based ICE Benchmark Administration (IBA), on the interest rates they would charge clients based on their outlook for the e💃conomy.

It was calculated in five different currencies: the U.S. dollar, euro, British pound, Swiss franc, and Japanese yen. An initial phase-out of LIBOR began on Dec. 31, 2021, when one-week and two-week U.S. dollar LIBOR rates stopped being published.

LIBOR will be replaced by the 澳洲幸运5开奖号码历史查询:Secured Oveꦬrn🥀ight Financing Rate (SOFR), which will become the benchmark interest rate for dollar-denominated loans and derivatives. Unlike LIBOR, SOFR is calculated based ♓on data from observable transactions rather t💮han estimates of future interest rates, and as such is considered a more accurate and secure pricing benchmark.

One of the main drawbacks of LIBOR was its vulnerability to manipulation. Because it was calculated using estimates of future interes🦄t rates rather than actual rates, banks could simply submit lower rates in an effort to reduce their lending costs.

Manipulation of LIBOR and its use in calculating interest rates on credit default swaps may have worsened the 澳洲幸运5开奖号码历史查询:2008 Financial Crisis. In 2012, a scandal emerged involving multiple banks—among them UBS, Barclays, Deutsche Bank, Rabobank, and the Royal Bank of Scotland—which were investigated for colluding to 澳洲幸运5开奖号码历史查询:manipulate LIBOR for profit.

These events tarnished LIBOR's credibility and prompted banking regulators to consider an alternative benchmark. Using a more timely benchmark such as SOFR provides fewer opportunities for market manipulation and reduces the risk of fraud in the interbank market.