FCA chief Martin Wheatley warns against moving too fast on Libor

City A.M. Reporter
THE HEAD of the Financial Conduct Authority, Martin Wheatley, has warned against rushing into regulating how the interest rate benchmark is set.

Wheatley said yesterday that the interbank lending rate needs to be overhauled but there remain limitations on how far and how quickly reforms can go.

“We’d like to come up with the perfect solution. We’d like to come up with something that is based on a deep and liquid market, that is based on genuine observable transactions that are themselves regulated, but we've also got to be realistic,” said Wheatley, who is co-chairing a G20 review into Libor.

His comments appear to conflict with those made by the US Commodity and Futures Trading Commission, whose chairman has said Libor – which is calculated by asking banks at what rate they can borrow funds – should be replaced with a reference rate based on market transactions.