, Columnists
Libor Needs More Competition
Fixing Libor will require moving to other benchmarks better tailored to their purposes. This might require a push from regulators.
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Two years after news broke that traders at the world's largest banks had been manipulating interest-rate indicators used to value hundreds of trillions of dollars in securities and derivatives, a crucial question remains: How can we restore confidence in benchmarks on which the financial system depends the way the rest of us depend on tap water?
Today, an international group of regulators known as the Financial Stability Board issuedtwo reports-- to which we contributed -- that offer what we see as viable answers. Turning the proposals into a solution, though, will require further action from national policy makers.