Feb. 25 (Bloomberg) -- The U.K. government formally started the search for a replacement body to oversee the London interbank offered rate as it tries to restore credibility to a benchmark tainted by scandal.
A seven-member panel including Sarah Hogg, chairman of the Financial Reporting Council, the Financial Services Authority’s Martin Wheatley, and the Bank of England’s Paul Fisher will recommend a new administrator this year, the Treasury said in a statement on its website today. Members of the British Bankers’ Association, the lobby group that created the benchmark in 1986, voted earlier today to relinquish oversight of Libor.
Wheatley recommended in September the BBA should be stripped of responsibility for the benchmark rate for more than $300 trillion of securities after regulators found firms had tried to manipulate the gauge. Barclays Plc, UBS AG and Royal Bank of Scotland Group Plc have been fined more than $2.5 billion by U.S. and U.K. regulators for rate-rigging, and more than a dozen more firms are still being probed.
“The government is determined to rebuild the reputation of U.K. financial services,” Treasury minister Greg Clark said in the statement. “The committee will follow the principles laid out by the Wheatley Review and recommend an organization that displays the highest standards of transparency and probity to administer Libor.”
The other members of the panel are: George Handjinicolaou, deputy chief executive officer of the International Swaps and Derivatives Association; John Kingman, second permanent secretary at the Treasury; John Stewart, chairman of Legal & General Group Plc; and Colin Tyler, CEO of the Association of Corporate Treasurers.
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