The owner of the New York Stock Exchange will be handed control of the Libor benchmark interest rate, removing it from British oversight. NYSE Euronext beat off financial data provider Markit and a joint bid from the London Stock Exchange and Thomson Reuters to win the contract.
Libor was previously overseen by the British Banker's Association (BBA). In September, chief executive of the Financial Conduct Authority (FCA) Martin Wheatley recommended that the BBA should lose its responsibility for setting the benchmark rate following a series of manipulation scandals. The UK government formally started searching for a replacement in February.
Baroness Hogg, who was on the panel searching for the BBA's replacement, said that "this change will play a vital role in restoring the international credibility of Libor".
Libor, or the London Interbank Offered Rate, is the average interest rate London banks estimate they would be charged if they borrowed from other banks in different currencies and over different periods, traditionally calculted by a daily poll carried out by Thomson Reuters on behalf of the BBA.
Under new rules introduced by the FCA, the administrators of the rate and participating banks will need to appoint a regulator-approved person to ensure compliance.
NYSE Euronext itself is being acquiered by InterContinentalExchange (ICE) in a merger worth $10bn in coming weeks.