Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Libor interest rates could be scrapped in an attempt to restore trust in the financial system, the head of the new city watchdog will say in a speech today.
Martin Wheatley, who will run the Financial Conduct Authority, will argue that "the existing structure and governance of Libor is no longer fit for purpose and reform is needed".
"Trust in a vital part of the financial system has been lost," he will say in the wake of attempts to fix the rate by traders at a number of banks in what has become the biggest City scandal since the financial crisis.
That scandal claimed another scalp yesterday as Bank of Tokyo-Mitsubishi suspended a third trader in connection with regulators' investigations into the affair.
Scrapping Libor would send a shudder throughout the City because of the sheer number of products whose price depends on it.
Mr Wheatley, who leads the Libor review, will say he accepts that "any migration to new benchmarks would require a carefully planned and managed transition, in order to limit disruption to the huge volume of outstanding contracts that reference Libor".
But he will say there will be no compromise on the need for reform: "Our core purpose will be to make sure financial markets work well so that consumers get a fair deal."
Mr Wheatley was the No 2 at the London Stock Exchange before he left for Hong Kong, where he became the head of its financial regulator and established a reputation as a hardliner.
He will argue that poor conduct in the City is not only about fraud but extends to "a range of activities that exploit differences in expertise or market power and can all too often result in conflicts of interests".
"What's clear to me is that such conduct is not a victimless act simply because it takes place between sophisticated market participants. It's clear from the reaction to the Libor scandal that consumers think it's important."
Another option for reform could include forcing all banks to join a new Libor calculation system and making the people who submit returns to it liable for criminal prosecution if they submit false data.
Libor is calculated from the rates banks say they expect to pay to borrow money from others. It is compiled by Thomson Reuters under the auspices of the British Bankers' Association.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments