According to the Wall Street Journal on the 27th, the London interbank offered rate (London interbank offered rate, or Libor) should cease to exist within five years.

On Thursday, a senior UK regulator said Libor would be phased out. The scandal-plagued benchmark interest rate is used to price trillions of dollars in loans around the world.

Andrew Bailey, chief executive of the UK Financial Conduct Authority, which oversees Libor, said on Thursday that he would start working on a plan to shift to an alternative benchmark by the end of 2021.

Libor is calculated each working day by collecting estimated borrowing costs from major banks. In the wake of the interest rate manipulation scandal, Libor's integrity has been called into question. In the scandal, traders at several banks were able to manipulate the rise and fall of Libor by submitting false data.

A team from the Bank of England is studying possible alternatives to Libor. Any transition must take place slowly and in stages.

According to the central bank, about 30 trillionSterlingOTC derivatives (about $39.4 trillion) refer to this interest rate, while dollar Libor contracts amount to hundreds of millions. One potential alternative is the pound's overnight average index (Sterling Overnight Index Average), which is calculated by banks' overnight financing rate in the sterling unsecured market. The Bank of England is currently in the process of reforming the interest rate mechanism.