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Derivatives & Options

LIBOR

Also called: London Interbank Offered Rate, LIBOR transition

LIBOR was the benchmark rate at which banks said they could borrow from each other, and for decades it priced hundreds of trillions in loans and derivatives. It was built on submitted estimates rather than trades, and traders were caught rigging those submissions — the scandal that killed it. It was retired in stages through 2023 in favour of transaction-based rates like SOFR, in the largest financial plumbing migration ever attempted.

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