(MENAFN- The Peninsula) The Financial Stability Board, a global watchdog, said yesterday it had created a taskforce to probe benchmark interest rates such as the scandal-struck Libor.
"The Steering Group will examine whether the governance and processes around these benchmarks meet agreed international standards," the FSB said in a statement.
The group is "broadly representative of the national or regional authorities that are home to each major reference rate", and is chaired jointly by Martin Wheatley, head of Britain's Financial Conduct Authority, and Jeremy Stein, governor of the US Federal Reserve Board.
Besides bringing together central bankers and regulators, it will also involve a sub-group of market players in order to "review options for robust reference rates that meet the needs of the private sector".
The Libor, or London Interbank Offered Rate, is a flagship reference instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money.
It is calculated daily, using estimates from banks of their own cost of borrowing on the interbank market, and affects the pricing of more than $300-trillion of contracts across the world, according to regulators.
London's role, however, has been undermined by revelations that major banks, among them Barclays, Royal Bank of Scotland and UBS, have manipulated the Libor their advantage, especially during the turmoil and aftermath of the 2008 global financial crisis.
The Libor's eurozone equivalent, the Euribor, is set in Brussels and has also been tainted by rigging scandals.
The European Union's executive, the European Commission, is expected to present a raft of proposals to tighten up oversight of such key financial market benchmarks.
Sources have said that could involve moving the Libor from London to Paris and placing it under the supervision of the European Securities and Markets Authority.
But such a move would be likely to anger Britain, which jealously guards the City of London, home to one of the world's largest financial markets.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.