FSA managing director Martin Wheatley will today announce plans to reform or scrap the London interbank offered rate (Libor) in a bid to restore “credibility and trust” in the much maligned benchmark.
Wheatley, who has been appointed to lead a review into the rate, will also announce plans to deliver policy proposals on other price setting rates similar to Libor, which are set by judgment rather than neutral metrics.
He will say: “We’re also going to look beyond Libor, at whether similar considerations apply to other price-setting mechanisms in financial markets, and provide provisional policy recommendations in this area.
“Other markets also rely crucially on benchmarks, and some may share similar weaknesses to Libor, such as being judgement-led or having similar governance structures, and may therefore benefit from closer examination.”
Libor was put under the microscope last month after evidence emerged Barclays had attempted to manipulate the figures.
Wheatley will launch a four week consultation today to explore preliminary ideas.