In a speech today, Financial Services Authority (FSA) managing director Martin Wheatley will reveal a ten-point plan to overhaul the Libor system and stamp out the “shocking behaviour” that led to systemic rate manipulation at the height of the financial crisis.
The process needs to be regulated by the FSA, with those that submit rates formally approved by the City watchdog, and bankers who break the law subject to criminal sanctions, he says.
Accusing the British Bankers’ Association of having “clearly failed” in overseeing Libor, Mr Wheatley says the BBA will see its responsibility for managing the process taken away.
It is inviting other groups to apply to take over the role overseeing Libor and wants the new managing body to draw up a code of conduct.
Mr Wheatley said Libor did not need to be replaced, but “the system is broken and needs a complete overhaul”.