Exchanges Group ICE To Unveil Libor Reforms

By Mark Kleinman, City Editor

Administration of the tainted interbank borrowing rate Libor will be handed over next month following approval from the City regulator.

Sky News understands that the US-based IntercontinentalExchange Group (ICE) will announce on Friday that it has received the go-ahead to begin overseeing the daily setting of some of the world's most important financial indices.

The handover will take place in early February in the wake of an escalating scandal which has seen some of the biggest global banks fined hundreds of millions of pounds for failing to prevent traders attempting to manipulate Libor and related benchmarks.

As part of the changes, which will see the British Bankers' Association relinquish oversight of Libor, ICE will announce that Andre Villeneuve, a City grandee, will become chairman of ICE Benchmark Administration Limited.

Mr Villeneuve is a former chairman of LIFFE, the futures market owned by NYSE Euronext, which was itself subsumed by ICE in an industry-reshaping merger last year.

So far, four banks - Barclays, Royal Bank of Scotland, Rabobank and UBS - have been fined close to £2bn by regulators for their role in the global rate-rigging scandal, with a queue of others waiting to settle.

The European Commission has also fined a string of large banks in recent months, adding to the costs for the industry of resolving the rate-rigging scandal.

A review of the rates by Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), found that the rate was open to manipulation and made a series of recommendations including sharply reducing the number of rates set as part of the process.

As the new Libor administrator, ICE will still be subject to FCA regulation and supervision.

The FCA is expected to say on Friday that it has approved the handover of Libor, according to insiders.

ICE could not be reached for comment, while the FCA declined to comment.

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