Libor scandal delays Bank of Japan dollar funding in loan scheme

The Bank of Japan said today that it will delay lending US dollars under a scheme to support growth industries because of expected changes to the London Interbank Offered Rate (Libor).

The funds, which had been scheduled to be disbursed from 6 September, were originally due to be lent at a rate equal to six-month dollar Libor, the bank said.

However, due to a scandal over manipulation of Libor, authorities in Britain and the US are formulating proposals that could change the way these interbank rates are calculated.

The BOJ said it aims to start funding as soon as possible for the scheme, but the timing will depend on progress in Libor reforms this autumn.