British banks willing to give up Libor role

The British Bankers Association has cleared the way for radical reforms to the way Libor interest rates are calculated. The current system sees banks submitting the rates at which they expect to borrow from other banks to Reuters from which Libor is calculated under the BBA's auspices.

Martin Wheatley, Britain's chief financial regulator, is expected to call for that to be replaced with a "market" system based on what banks actually pay, overseen by another body, when he unveils his Libor review on Friday.

The BBA's council has voted to give up its responsibility for Libor in an attempt to clear the way for that to happen quickly. It said that if the review recommended "a change of responsibility for Libor, the BBA will support that". The review was prompted by revelations that traders at banks including Barclays tried to fix the rates.