King calls fellow central bank chiefs for summit over Libor

Julian Harris
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BANK of England governor Sir Mervyn King has written to other central bankers from around the world to propose talks over how to reform, or even scrap, the now controversial Libor lending rate.

King suggested that the issue should be top of the agenda at the Economic Consultative Committee meeting in the Swiss town of Basle on 9 September, City A.M. understands.

It is “very clear that radical reforms of the Libor system are needed,” King said in his letter.

And yesterday Bank of Canada governor Mark Carney also revealed that discussions over the inter-bank lending rate will continue the following week in Basle, at the Financial Stability Board’s meeting.

Meanwhile, US Treasury secretary Timothy Geithner insisted yesterday that the New York Fed – which he used to head ­– was not culpable over the Libor scandal. American authorities acted early once they were aware of potential problems with Libor, Geithner said, arguing that more of their suggestions should have been implemented by the British Bankers’ Association.