NYSE Euronext to take over running of Libor
Changeover to be completed next year seeksto restore confidence in scandal-hit lending rate
The company behind the New York Stock Exchange will take over running and restoring confidence in the scandal-hit London interbank offered rate, or Libor, a British committee has ruled.
The independent panel, set up by the Treasury, chose NYSE Euronext yesterday to take over Libor from the British Bankers' Association, which had supervised the rate-setting for decades.
The changeover is scheduled to be completed by early next year, the panel's chairwoman, Sarah Hogg, said in a statement. The committee did not identify other bidders.
"This change will play a vital role in restoring the international credibility of Libor," Hogg said.
Libor underpins trillions of dollars of transactions all over the world. It is an average rate that measures how much banks expect to pay each other for loans. The rate is also used in calculating borrowing costs of hundreds of trillions of dollars in bonds, car loans and derivatives.
But the rate was based on a system that relied on the banks to be honest. Revelations of its manipulation last summer both shocked the financial community and forced a reform in how it was administered.
