The London Interbank Offered Rate is being scrapped from 2021 and with it memories of a reputation-mincing reference rate.
Oddly, perhaps, I have fond memories of the Libor which I regularly covered out of London when I was a debt correspondent at Reuters.
Fondly remember interviewing the then chief of the British Bankers Association, the charming Angela Knight, a former Treasury minister, about the rate used to determine the price at which one bank would lend money to another.
And fondly remember writing daily money market reports based on the latest slight moves in the rate. Watching three-month sterling Libor drop further and further during the 2008 interbank crisis. Even back then in 2009 and 2010 it was a showstopper and our news agency gave it much news priority.
It was to the outside world an old school regime even if at the time we had no idea just how manipulated it was and how merciless those involved. But by 2010 we certainly had our doubts about this idyllic oddity.
A select group of traders at a select group of London banks would select the rate and it would get published before midday daily.
Our Eurozone banking colleagues used to snarl that their Euribor in Frankfurt also involved guesswork and sentiment but had a wider pool of banks contributing.
We started to know that Libor was suspicious. Even though on the surface it didn’t move much at one midday meeting to the next even small basis point moves is all it took for allegedly colluding banks to profit from a few fixing imperfections.
Trials and fines followed in the past few years, after I left Reuters at the end of 2010.
All of it tarnished a useful benchmark which references USD350 trillion assets globally.
But with no straight replacement yet known and new owners Intercontinental Exchange vowing to keep it there’s a risk of splitting liquidity or confusing markets.
The deadline of 2021 seems more political than anything else. After all no substitutes for this complex market have been suggested.
Some cynics even suggest another Libor style scandal could follow.
All if which plays into the hands of a European Union and Euribor club standing ready to wrench influence from the City of London in these Brexit times.
Given the years since the scandal broke it is disappointing no tradeable measurable alternative has yet been found.
Well, I guess traders have to earn a living from something.