Banks were fined billions of dollars for trying to rig Libor, used as a reference price to $350 trillion in home loans to credit cards, prompting central banks to look for alternatives.
The Financial Conduct Authority (FCA) published a statement on Friday that outlined plans for 20 panel banks to maintain support for Libor - the London interbank offered rate - until a transition can be made.
In a speech to media outlets yesterday given at newswire Bloomsberg's London offices, Bailey said the market that had traditionally made LIBOR functional was not now "sufficiently active", which raised "serious questions" about its future.
The watchdog does not have powers to force banks to continue submitting for such an extended period and needed their backing to avoid potential disruption in markets if many banks began pulling out of panels.
The financial regulator said: "The FCA welcomes the support and agreement of all banks to remain as submitters until 2021".
The Libor rate will remain alive until 2021 after 20 banks agreed to support it. Société Générale will stop submitting to the US dollar panel, and Credit Agricole will no longer make submissions to the Japanese yen panel.
Manipulation of the LIBOR rate was seen as a factor in 2008's banking crisis, and some commentators, including the FCA's own chief executive Andrew Bailey, pictured above, accepted that it was only a matter of time before it ceased to exist.
Libor, the interbank borrowing rate, has a stay of execution until 2021 as investment banks continue to use the rate until it is gradually replaced by, as yet unidentified, alternatives.
The UK financial regulator intends to develop an alternative rate and phase out Libor by the end of 2021.