LONDON (MNI) – Bank of England Governor Mervyn King has said that
the BOE welcomes the Wheatley Review’s proposals to reform the
LIBOR-setting process, adding that he hopes the changes are implemented
as soon as possible.
“The Bank very much welcomes the Wheatley Review’s proposals to
improve the functioning, governance and regulation of LIBOR and would
want these to be implemented as soon as possible,” King said.
“Over the medium to long term, further thinking will be needed to
meet the challenge of benchmarks based on thinly traded markets,
especially when they are quote-based,” he added.
Today’s report from Financial Services Authority managing director
Martin Wheatley recommends that responsibility for LIBOR should be
stripped from the British Bankers Association and the number of
reference rates slashed to just 20 from the current 150.
The Wheatley report, commissioned in the wake of the LIBOR rigging
scandal, urges radical reform of the London interbank rate and says the
international community should look at alternatives to it.
Wheatley’s report makes clear it would not be practical to create a
short term replacement for LIBOR. It does, however, recommend a number
of sweeping changes and says bodies should tender to take control of
LIBOR from the BBA.
The UK Treasury has also backed his proposals and said the
government will seek to legislate the changes into law as soon as
parliament returns in October.
–London newsroom: +44 20 7862 7491;
e-mail:ukeditorial@marketnews.com
[TOPICS: M$$BE$,M$B$$$]
