Bloomberg reports that Financial Services Authority Managing Director Martin Wheatley’s 'appropriate and credible' recommendations will be placed into legislation that should be approved early next year, Greg Clark, financial secretary to the U.K. Treasury, said in a telephone interview in London Friday. Wheatley proposed stripping the British Bankers’ Association of responsibility for the rate and adopting criminal penalties for interest-rate manipulation.
Wheatley began the review after Barclays Plc (BARC) paid a record $470m fine in June for manipulating the London interbank offered rate, used to set rates for more than $300 trillion of securities. At least a dozen banks are being probed worldwide over allegations they colluded to manipulate the benchmark to profit from bets on derivatives.
The review 'could mark at least the end of the beginning of the clean-up operation', Andrew Tyrie, chairman of a lawmaker panel on finance, said in an e-mailed statement. The reforms could help restore 'trust, both in Libor and in banking'.
Wheatley said some measures, including a tender for groups to bid to manage Libor and the phasing out of some currencies and maturities from the benchmark, will begin immediately.
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