Treasury in move to overhaul Libor rules

| July 30, 2012 | 0 Comments

Daily Mail Reporter

16:26 EST, 29 July 2012


16:26 EST, 29 July 2012

The Treasury will today set out the scope of a radical overhaul of Libor, the interest rate benchmark fiddled by Barclays and other banks.

It will set out the terms of a major review into the Libor rate manipulation scandal being spearheaded by top regulator Martin Wheatley.

A consultation document is expected around August 10 and Wheatley is hoping to report by the end of September.

Overhaul: Regulator Martin Wheatley will examine whether Libor should be based on actual transactions

Overhaul: Regulator Martin Wheatley will examine whether Libor should be based on actual transactions

The rapid time-frame reflects recent
statements from the Treasury that it is determined to take quick and
decisive action over the scandal.

Wheatley will examine whether Libor
should be based on actual transactions. At the moment, it is based on a
basket of estimates of rates the banks think they might be granted.

He is also expected to examine the
oversight of Libor-setting, which is supervised by the industry’s own
lobby group the British Bankers’ Association.

Here’s what other readers have said. Why not add your thoughts,
or debate this issue live on our message boards.

The comments below have not been moderated.

Fox in Move to Overhaul Henhouse… how stupid do they think we are? They’re all hand-in-glove and the whole banking culture has to go.

Lets face it not just LIBOR rates RPI and CPI all manipulated
Take a look at September 2011 RPI/CPI figures RPI 5.6 %
2012 September figures will be half that based on the drop of OIL but not at the pumps, These rates are massaged.
Don’t forget your annual pension increase is based on those figures, that’s why they manipulate them.

When the rates were being manipulated in the lead up to the credit crunch, there were very few actual transactions to base any calculation on, given that 150 different rates are set each day (10 currencies with15 maturity terms for each). With low actual transaction rates, any calculated rates could vary greatly from day to day, depending on the credit ratings of the actual banks borrowing on a specific day.

Why would the treasury want to stop LIBOR being manipulated when they are and have been manipulating interest rates for 3 years or more? If LIBOR was not kept artificially low it would not be possible to hold base rate down to the present continued “emergency” level of 0.5 % let alone the mooted 0.25 %. When rogues are caught with their finger in the pie their primary defence is always to attempt to blame everyone else. The treasury, BoE and government are not coming clean on this scandal, and how it fitted and fits into their overall plan of rigging interest rates and preventing free markets from functioning!

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Leave a Reply

You must be logged in to post a comment.

Get Adobe Flash player