City of standards: London and the rise of LIBOR in global finance

Abstract The rise of global finance in the latter twentieth century was an epochal transformation in the history of capitalism and new socio-technical devices emerged to value these innovations, among the most significant being the London Interbank Offered Rate (LIBOR). Today, LIBOR values over $200 trillion in global financial markets despite the repeated attempts by international regulators to repeal the benchmark since its infamous scandal in 2012. How did LIBOR ever rise to its apotheosis in global finance? In this paper, I provide a historical analysis of the rise of LIBOR in global finance, tracing its emergence as an unstandardized rate for eurodollar syndicated loans in the 1960s to its evolution as a standardized benchmark for the growing derivative market in London by the 1980s. In tracing the rise of LIBOR, I argue that global financial markets were shaped by practices and norms particular to the financial centre of London. I conclude by offering the concept of ‘positionality’ to help theorize the construction of global finance.