During the global financial crisis, the credit risk component of LIBOR fluctuated dramatically, which meant that LIBOR behaved quite differently from rates with no credit risk embedded in them, such as risk-free rates.
LIBOR is a less-than-ideal rate for most derivatives contracts and secured borrowing because movements in the credit risk component do not reflect well the underlying risks of  7  2  The actual question asks banks only about transactions of “reasonable market size”. This size is not defined and is left to banks’ judgment. BIS central bankers’ speeches  those contracts.