LIBOR is a leading interest rate benchmark, set each day according to estimates from up to 18 global banks. It stands for London Interbank Offered Rate. There are LIBOR rates for multiple different currencies: including GBP, USD, EUR and more.
LIBOR is calculated by surveying banks to find out the rates they would charge each other on loans of various maturities, based on the current economic outlook. The LIBOR rate is an average of what the banks will charge each other, and is then used across the global financial system, particularly for pricing derivatives.
Usage of LIBOR (and other IBORs) is being phased out, to be replaced with a near-risk-free rate (RFR).
The banks involved were all issued heavy fines, and the administration of LIBOR was moved to the InterContentinal Exchange Benchmark Association (IBA). However, loss of faith in the rate led the UK regulators to look for a LIBOR replacement: SONIA.
The deadline for the transition away from LIBOR in the UK is set for December 2021.