Blow for the City as NYSE takes control of LIBOR

The UK Treasury has taken control of LIBOR away from the British Bankers’ Association and handed it to New York Stock Exchange following the rate rigging scandal.

NYSE Euronext Rate Administration is the new company which has been created to manage the the London Interbank Offered Rate. It is domiciled in the UK and approved by the Financial Conduct Authority, and will take over the BBA’s responsibility for LIBOR in 2014.

NYSE Euronext saw off competitors Thomson Reuters and the London Stock Exchange to gain the contract, for which it paid £1, according to reports.

The head of the UK regulator, Martin Wheatley, put the contract to manage LIBOR out to tender in April following the scandal in which it was found some of the City’s largest banks had been manipulating lending rates.

The scandal claimed several high profile scalps, including that of Bob Diamond, then CEO of Barclays, and saw others come before the UK Parliament’s Treasury Select Committee to face a grilling by parliamentarians.

Barclays was fined a total of £290m by UK and US regulators for its role in the scandal, RBS was fined £390m, and UBS $1.5bn. The FCA continues to investigate four more institutions.

 

This article was first published on Investment Week

 

 

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