The May 2008 disclosure of the manipulation of London Inter-Bank Offered Rate (LIBOR), in what has become known as the ‘LIBOR Scandal’; resulted in regulators for the United States, the United Kingdom and the European Union fining banks more than $9 billion.  LIBOR underpins over $350 trillion worth of transactions each year, of which about $200 trillion consists of derivatives, mortgages and, of particular of concern here, syndicated loans.1  To get a better sense of the magnitude of LIBOR-based transactions, it is useful to consider that the amount of annual transactions under LIBOR totals about five times the gross domestic product (GDP) of the entire world.  In 2017 statements by the chairman of the Bank of England led to increased

Part One of this two-part E-alert looked at the challenges facing London Inter-Bank Offered Rate (LIBOR) LIBOR and how the syndicated loan market is dealing with the potential non-availability of these rates. Part two considers if blockchain technology and a ‘LIBOR currency’ could boost submission incentives and make the process more secure. Most discussions surrounding LIBOR involve ways to replace it using a similar polling mechanism. However, utilizing recent advancements in the field of financial technology, including blockchain technology, might offer innovative ways to improve or replace the benchmark. Financial technology may be able to solve the three main problems of LIBOR as it now exists: manipulability, opacity, and a lack of incentives for data providers. Currently, no such solution has been