|
The decision to award the tender to a U.S.-based organization will help restore the credibility of Libor, said Mark Taylor, dean of the Warwick Business School and a former managing director of the investment firm, BlackRock. Taylor said that since much of the criticism of how LIBOR was managed came out of the U.S., having a respected player such as NYSE Euronext take charge will help restore confidence among investors, showing that it is "squeaky clean." But British officials expect further reforms to come as part of the package
-- such as the documentation of transactions and submissions that are revealed well after the fact. Creating a paper trial will make it harder to manipulate the rate
-- despite the temptation to do so, Taylor said. "What it means is that they will get as close as possible to saying what the true market rate is," Taylor said. The rate will be administered by NYSE Euronext Rate Administration Limited, a new subsidiary of NYSE Euronext. The new company will be based in the UK and will be regulated in Britain by the Financial Conduct Authority. The global exchange said it is uniquely placed to restore the international standing of LIBOR. In a statement, the NYSE Euronext said the new division will be able to use the group's "trusted brand, long regulatory experience and market-leading technical ability to return confidence to the administration of LIBOR."
[Associated
Press;
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.