The British Bankers’ Association (BBA) said that it is willing to relinquish its responsibility for setting the interbank borrowing rate LIBOR (London Interbank Offered Rate) if the UK regulator proposes such a move.
The BBA’s announcement came ahead of changes due to be unveiled this week by
, who is due to become chief of new UK market regulator the Financial Conduct Authority (FCA) when it takes over financial regulation next spring.
“If Mr Wheatley’s recommendations include a change of responsibility for Libor, the BBA will support that,” read a brief statement issued by the Association.
A government-commissioned review of LIBOR was announced following revelations that Barclays had have tried to manipulate LIBOR rates by putting in inaccurate submissions, which resulted in a record £290m fine being imposed on the bank in June from both US and UK regulators. Several other banks are also under investigation for suspected rate rigging.
The Wheatley review, due out on Friday, is expected to propose anchoring LIBOR interest rates to real transactions, rather than rates which panel banks believe they could borrow from their peers.
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