LIBOR will end in next four years

Baku. 27 July. REPORT.AZ/ LIBOR may be phased out by 2021 year end.

Report informs citing Bloomberg, the Financial Conduct Authority (FCA) says.

Notably, LIBOR (London Interbank Offered Rate) reflects the weighted average interest rate on interbank loans on the London market.

U.K. regulators and banks look to replace the scandal-tarred indicator with a more reliable system. For this reason, they intend to get rid of this rate step-by-step until 2021.

Libor became a byword for corruption after traders were caught manipulating the benchmark. "We do not think we will complete the journey to transaction-based benchmarks if markets continue to rely on Libor in its current form", Andrew Bailey, the head of the Financial Conduct Authority, said.

The analytical group of Report News Agency notes that currently in the eurobond market rates are calculated by LIBOR, and to these rates a risk premium is added in accordance with the rating of the country or organization. FCA, in turn, referring to the fact that LIBOR and the discount rate differ, considers this step unfair.