British regulator outlines overhaul of scandal-hit
rate-setting mechanism
By ,
LONDON — A British regulator has outlined
wholesale reforms to a key international rate-setting mechanism whose
manipulation by Barclays bank was exposed in a scandal which erupted several
months ago.
Financial Services Authority managing director Martin Wheatley says the
London Interbank Offered Rate will undergo a complete overhaul.
Barclays chief Bob Diamond resigned after it was revealed his bank was
fiddling with the rate, a key market index which influences the costs of a huge
range of financial instruments.
Wheatley said in prepared remarks released Friday the rate-fixing scandal was
an industry-wide problem which tore “the very fabric that our financial system
is built on.”
He accused the British Bankers’ Association, which oversaw the process, of
having clearly failed and said he was inviting other groups to take over the
process.
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