What must firms do regarding the London Interbank Offered Rate (LIBOR)?

Firms must participate in the submission and administration of the London Interbank Offered Rate (LIBOR) as part of their responsibilities in the financial markets. This involvement is crucial because LIBOR serves as a benchmark for various financial products, including loans and derivatives. By participating in the benchmark submission process, firms contribute to the rates that reflect the cost of borrowing in the interbank market, which is essential for ensuring transparency and accuracy.

Additionally, firms must adhere to regulations concerning benchmark rates to enhance the integrity and trustworthiness of the financial system. Participation means providing the necessary submissions that help to calculate LIBOR, which supports the entire financial ecosystem reliant on these rates.

In contrast, guaranteeing interest rates, providing historical data only, or ceasing transactions would not fulfill the essential role that firms have in maintaining and contributing to the benchmark rate's reliability and usefulness in the market. While firms may be involved in these other activities in different contexts, they do not capture the core responsibility related to LIBOR as accurately as participating in its submission and administration.