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Banks’ Libor Calculation Methods May Be Standardized

Regulator proposes expanded group of transactions on which to base submissions, as well as new methodology.

By Julia Verlaine, Bloomberg | Updated on October 20, 2014

The group that administers the London interbank offered rate, seeking to bolster confidence in the benchmark after a manipulation scandal, is proposing to standardize how the banks calculate their submissions.

Global regulators said in July the rate, the key interest benchmark for more than $300 trillion of securities worldwide, shouldn’t rely on estimates that allowed traders at some of the world’s biggest banks to manipulate Libor. At least nine firms, including Barclays Plc and Royal Bank of Scotland Group Plc, have been fined more than $6 billion after traders colluded to rig the rate and related benchmarks for profit.

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