| Since 1986, the London Interbank Offered Rate (LIBOR) has been used as the benchmark interest rate at which major global banks lend to one another. LIBOR is administered by the Intercontinental Exchange that formulates the benchmark rate after consulting with major global banks on how much they would charge other banks for short-term loans. The standardized, transaction-based, and data-driven Waterfall methodology is used to ascertain LIBOR. Despite the many layers in the process, LIBOR has had a checkered history—it has been subjected to manipulation, scandal, and scorching criticism, impacting its credibility as the global benchmark rate. |
