LONDON, July 27 (Xinhua) -- The London Interbank Offered Rate (LIBOR) will be replaced by the end of 2021, capital markets regulatory body Financial Conduct Authority (FCA) said Thursday.
"We do not think markets can rely on LIBOR continuing to be available indefinitely," Andrew Bailey, FCA Chief executive, said in a speech in London.
"Work must therefore begin in earnest on planning transition to alternative reference rates that are based firmly on transactions," he said.
The LIBOR is a daily measure of the rate at which banks lend to each other, and the rate is reached by banks submitting transaction data to a central point.
The LIBOR has been under criticism since 2012, when it was discovered that the rate had been manipulated by some of the 20 bank panel participants.
Bailey did not announce a replacement for LIBOR, but the UK Sterling Overnight Index Average (SONIA) covers a busy market and could perform the same function. In addition the U.S. Treasury Repo rate is also active.
LIBOR rates are calculated for five currencies and seven borrowing periods ranging from overnight to one year and are published each business day.
