LONDON: The US owner of the New York Stock Exchange (NYSE) will take over the running of Libor, the benchmark interest rate at the centre of a global rigging scandal, wresting control from a British bankers’ trade body for a token £1 ($1.50).
An important cog in the world financial system, Libor rates are benchmarks for some $550 trillion in contracts from complex derivatives to credit card bills. But Libor’s credibility was destroyed by revelations that traders had routinely manipulated them to their own advantage.
NYSE Euronext will from early 2014 take over Libor from the British Bankers’ Association (BBA), which had administered the rates since the 1980s, a British committee set up to choose a new operator said yesterday.
However, Libor — or London interbank offered rate — will continue to be regulated by Britain’s Financial Conduct Authority (FCA), according to the advisory committee chaired by Sarah Hogg.
Reuters
