Mark Gilbert , Columnist

Let Libor Survive the Virus to Die Another Day

Shifting trillions of dollars of securities to new benchmark interest rates is a distraction finance can do without for now.

May 18, 2020 at 5:00 AM UTC

By Mark Gilbert

Mark Gilbert is a Bloomberg Opinion columnist covering asset management. A former London bureau chief for Bloomberg News, he is author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”

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Photographer: Simon Dawson/Bloomberg

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Libor, once dubbed the world’s most important number, is scheduled to perish from the end of next year. With the fallout from the pandemic demanding the full attention of banks, it would be better to grant it an official stay of execution.

The flaws with the London Interbank Offered Rate, the suite of benchmark interest rates governing the value of trillions of dollars of securities, are well known. As well as its vulnerability to rigging by traders who submit the rates, the underlying interbank lending market that guaranteed its historical authority has dwindled to almost nothing.