The inter-bank lending rate that has been at the heart of a price-fixing scandal is to be killed off within 4 years.

The London Interbank Offered Rate (LIBOR) is to be replaced by the end of 2021 with "a more reliable alternative" said the head of the Financial Conduct Authority (FCA), Andrew Bailey, in a speech Thursday.

Libor exploded into people's consciousness in 2012 when an investigation revealed significant fraud by member banks who helped set the daily rate of bank-to-bank borrowing.

The FCA has regulated Libor since 2013 and in his speech, Bailey said there was evidence was the benchmark is losing relevance.

"The underlying market that LIBOR seeks to measure – the market for unsecured wholesale term lending to banks – is no longer sufficiently active."

Bailey added that there seemed little prospect of the markets becoming more active in the near future and "serious questions" were in place about Libor's future.

"If an active market does not exist, how can even the best run benchmark measure it?"

Bailey added that member banks currently feel uncomfortable about submitting daily rates based on minimal borrowing activity.