The London Interbank Offered Rate (LIBOR), sometimes called “the world’s most important number,” is being completely phased out by 2021. Even with this much advance notice, every business and those professionals who advise businesses need to begin preparation now.

Background

LIBOR is the dominant benchmark rate for determining interest payments on almost all adjustable-rate financial products—including corporate loans, mortgages, automobile and other consumer loans and student loans. Published daily by the ICE Benchmark Administration of Britain’s Financial Services Authority, LIBOR currently serves as the basis for calculating interest for between $200-$300 trillion of outstanding loan and derivative contracts.

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