LIBOR is a floating interest rate at which banks lends loans to another banks

No exchanging of securities happen between banks for these loans

5 currencies- eur, usd,gbp,chf,jpy

7 tenors

70 trillion global gdp

libor market- 350 trillion

16 banks ask what are the transactions happened on the previous day

BBA - bristish bankers association

After 2008 scandal administraion of libor moved from BBA toICE- Intercontinental
Exchange

16 banks estimate rates and give it to agencies and remove top and bottom 4 and the
mean of remaining 8 are published on router

In 2008 Nothern bank was the first that got defaulted

31 dec 2021 is the last date when LIBOR will be published

Change from LIBOR to ARR(Alternate Reference Rates

)
SOFR based on actual transactions and secured and only available for overnight
period

One day give securities and take money next day exchange back

Indivudual reference rates for reach currency

SOFR doesn't have tenors and if banks borrow for tenors and see the SOFR rates for
the past three months and compound it and pay that much interest

Another challenge-
on 1 jan 2022 contracts say that libor will be used so banks and companies that
have borrowed need to communicate with banks and work back to dertermine the
fallback if libor doesnt gets published and determine what the interest should be

Indian banks still catching up with the changes from LIBOR to other bank interest
rates