Last Tuesday, the US owner of the New York Stock Exchange announced that it would take over the running of London interbank offered rate (Libor) from the British Bankers' Association (BBA). The latter is the benchmark interest rate at the center of a global rigging scandal. The move was after Britain's financial regulator said that would have its integrity restored.
Libor rates were used as a reference for some US$550 trillion in contracts ranging from complex derivatives to daily credit card bills. Trust in the Libor was shaken after last year's controversies. The revelations stated that traders had a routine manipulation of funds that prompted an overhaul in the system after calculations were done.
NYSE Euronext would take over Libor from the BBA that would be given a token valued GBP1 according to a source that refused to be named as the contract details were confidential. NYSE Euronext's takeover of Libor would focus in integrity and credibility restoration. It also intends to ensure retained global rates.
Join the Conversation