UK Government accepts recommendations from the Wheatley Review of Libor in full

17 October 2012

Today the Government re-affirmed its commitment to reforming the submission and administration of the London Interbank Offered Rate (Libor) benchmark by accepting the recommendations of Martin Wheatley's independent review of Libor in full.

The Government has been absolutely clear since the Libor scandals emerged in June this year that any attempt to manipulate this important international benchmark is unacceptable and those that do so must be punished.

Immediate steps will now be taken to ensure that those who use and rely on Libor for trillions of dollars of transactions globally can have confidence in its integrity and the supervisory regime that underpins it.

In particular, the Government will amend the Financial Services Bill, which is currently before Parliament: 

• to bring Libor activities within the scope of statutory regulation, including the submission and administration of Libor;
• to create a new criminal offence for misleading statements in relation to benchmarks such as LIBOR, as well as amending the language of existing offences; and
• to provide the new Financial Conduct Authority (FCA) with a specific power to make rules requiring banks to submit to Libor, with reference to a Code of Practice produced by the rate administrator.

The Government believes that the current Libor administrator and the banks have to take responsibility for their failings and act upon Mr Wheatley’s recommendations, including the removal and replacement of the British Banking Association (BBA) as operational Libor administrator. Baroness Hogg will now lead a panel that will identify an appropriate successor to the BBA.

Financial Secretary to the Treasury, Greg Clark, said: "The Government is determined to restore the credibility of Libor. That is why we have accepted Martin Wheatley’s recommendations in full and will begin the process of implementing them without delay. The Government’s changes to legislation will ensure that those that attempt to manipulate Libor face the full force of the law. But this is just one part of the process, the banks and the BBA will have to play their part to ensure that reform is effective and Libor’s reputation is restored.”

Press release

Government's response to the Wheatley Review of Libor (written ministerial statement)

© HM Treasury