NYSE Euronext appointed to manage Libor

The owner of the New York Stock Exchange is to take control of the controversial interbank lending rate at the heart of the recent banking scandal.

NYSE Euronext will take over management of Libor from the British Bankers’ Association (BBA) early next year after a transition period as part of reforms of the benchmark rate.

The new Libor-setting group will be known as NYSE Euronext Rate Administration and will be based in the UK and regulated by the Financial Conduct Authority (FCA).

A review of Libor by FCA boss Martin Wheatley recommended the BBA should be stripped of its responsibility for setting Libor after widespread rate-rigging was found to have taken place among banks at the height of the financial crisis.

Barclays, Royal Bank of Scotland and Swiss bank UBS have so far been fined for the part they played in the manipulation of Libor, but a raft of other banks are also being investigated.

Mr Wheatley said: “Today marks a significant step in implementing the recommendations in my review of Libor.”

He added: “The selection of a new administrator, who will need to be authorised and then subject to ongoing scrutiny by the FCA, is an important step in enhancing the integrity of Libor.”

The BBA said it would “engage constructively” with the new Libor setter throughout the handover.

Anthony Browne, chief executive of the BBA, said: "We have been working hard with regulatory authorities and the Government to put in place much-needed reforms to the system.

“The new administrator will take over a benchmark with better regulatory oversight and improved governance.”

The Treasury has already launched a range of reforms for the benchmark rate, including bringing it under the scope of the regulation and introducing a new criminal offence for Libor fixing.

Greg Clark, Financial Secretary to the Treasury, said the appointment of NYSE Euronext marks the "next step" in the reforms.

“We want a financial sector that serves the interests of businesses and helps to drive economic growth — that is why since the Libor scandal last summer we have worked hard to reform this major international benchmark,” he said.

Agencies