After a long, illustrious but finally tumultuous and problem-riddled course starting in the Sixties, LIBOR – the London Interbank Offered Rate – was phased out in mid-2021 and is ending now, in mid-2023 as the main instrument helping the Euromarkets to develop and flourish, hosting an overhang of dollar liquidity (Eurodollars) and allowing for massive finance to be made available to businesses from London as a central global financial place.

The financial engineering behind this financial phenomenon was largely the artifact of a Greek (or rather a Crete-born), international banker, who worked initially for Manufactures Hanover, Minos Zombanakis. FT veteran journalist and financial expert David Lascelles wrote The story of Minos Zombanakis: Banking without borders published, in 2011 by Kerkyra Publications-economia Publishing. He set out the main steps for the emergence of the Eurodollar trade.

The birth of LIBOR

In order for syndicated bank loans and then for bonds to be issued on the rising Euromarket, a pricing mechanism accepted by all major funding players had to be agreed. At this point, a selected group of “reference banks” was named to declare their cost of funds, and such costs’ weighted average was to became LIBOR/the London Offered Interest Rate (after a spread was added for profit). This was the major achievement of M. Zombanakis, since London-based banks adhered to the system.

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David Lascelles is a leading international writer on financial affairs. A former Banking Editor and New York correspondent for the Financial Times, he is now Senior Fellow of the Centre for the Study of Financial Innovation, a London-based think tank which explores the future of the financial services industry. He is also the author of several books and research papers on banking and finance. He is married and lives in London.