LONDON —The British Bankers’ Association signaled Tuesday it will give up oversight of the London interbank offered rate following claims that traders manipulated the benchmark.
Financial Services Authority managing director Martin Wheatley is reviewing whether to bring oversight of the benchmark under the control of regulators after Barclays, Britain’s second-biggest lender, paid a record $471 million fine in June for manipulating Libor.
“If Mr. Wheatley’s recommendations include a change of responsibility for Libor, the BBA will support that,” the London-based lobby group said in a statement.
The BBA’s role as guardian of Libor, which is used to set rates for at least $300 trillion of securities, has been under pressure since the Bank for International Settlements first raised concern in 2008 that the benchmark was being manipulated.
The BBA’s response was branded inadequate by the Bank of England, while U.S. Treasury Secretary Timothy Geithner has said private, unregulated bodies such as the BBA shouldn’t oversee rates such as Libor.
“They have failed to pick up and respond to the signals early enough, so I’m not confident the BBA’s historic role has been good,” Wheatley said at an Aug. 10 news conference in London. “Frankly, it hasn’t. It still remains an open question as to whether, from an industry perspective, it’s still the best body to continue with that.”
