U.K. regulators' decision to abandon the Libor benchmark by the end of 2021 threatens to sow confusion in the market as the industry races to replace the scandal-plagued rate that underpins more than $350 trillion of financial products.

“It's going to be a feast for financial lawyers,” said Bill Blain, head of capital markets and alternative assets at brokerage Mint Partners in London. “Libor is part of the financial infrastructure that supports the swap, loan and floating-rate bond industry. Everyone now will need to check what contracts say, and it's going to be a headache for anyone with a Libor-based contract.”

Andrew Bailey, head of the Financial Conduct Authority, said Thursday in London that Libor isn't sustainable because of a lack of transactions providing data. Industry and regulators need to step up planning for a transition to “alternative reference rates that are based firmly on transactions,” he said. Bailey outlined the factors involved in the move away from Libor, without advocating any specific candidate to replace it.