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Consider the following statements regarding the London Interbank Offered Rate (LIBOR).
1. The London Interbank Offered Rate (LIBOR) is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
2. The European Central Bank manages it (ECB).
3. LIBOR will not be published any more after end-2021.
Which of the above statements is/are correct?
  • a)
    1 and 2 only
  • b)
    1 and 3 only
  • c)
    2 and 3 only
  • d)
    All of the above
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Consider the following statements regarding the London Interbank Offe...
The London Interbank Offered Rate (LIBOR) is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
LIBOR, which stands for London Interbank Offered Rate, serves as a globally accepted key benchmark interest rate that indicates borrowing costs between banks. The rate is calculated and published each day by the Intercontinental Exchange (ICE). Still, due to recent scandals and questions around its validity as a benchmark rate, it is being phased out.
Libor will not be published any more after end-2021, and market participants are strongly encouraged to transition to other risk-free rates.
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Most Upvoted Answer
Consider the following statements regarding the London Interbank Offe...
Explanation:

London Interbank Offered Rate (LIBOR) is a benchmark interest rate that reflects the average rate at which major global banks lend to each other in the international interbank market for short-term loans. It is widely used as a benchmark for various financial instruments such as loans, bonds, and derivatives.

Statement 1: Correct.

Statement 2: Incorrect. The European Central Bank (ECB) does not manage LIBOR. LIBOR is managed by the Intercontinental Exchange (ICE).

Statement 3: Correct. The UK Financial Conduct Authority (FCA) has announced that LIBOR will not be published after the end of 2021. This is because the number of transactions that underpin LIBOR has declined significantly, making it unsustainable as a benchmark.

Therefore, the correct answer is option B - 1 and 3 only.
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Consider the following statements regarding the London Interbank Offered Rate (LIBOR).1. The London Interbank Offered Rate (LIBOR) is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.2. The European Central Bank manages it (ECB).3. LIBOR will not be published any more after end-2021.Which of the above statements is/are correct?a) 1 and 2 onlyb) 1 and 3 onlyc) 2 and 3 onlyd) All of the aboveCorrect answer is option 'B'. Can you explain this answer?
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