Central bankers and regulators will hold talks in September on whether the troubled global Libor interest rate can be reformed or whether it is so damaged that the benchmark of borrowing costs should be scrapped.
Bank of England Governor Mervyn King told fellow central bankers in a letter that it was "very clear that radical reforms of the Libor system are needed".
Fed Chairman Ben Bernanke and global financial regulator Mark Carney, who is also governor of the Bank of Canada, on Wednesday floated possible alternatives to the London interbank offered rate, which some bankers manipulated in the 2007-09 financial crisis.
"There are different alternatives if Libor cannot be fixed," Carney told a news conference in Ottawa.
"If it's structurally flawed and can't be fixed -- which is a possibility -- there may need to be different types of approaches, and we need to think that through."
The concerns over Libor prompted scrutiny of lending benchmarks elsewhere. The European Central Bank (ECB) is putting pressure on the organizers of Euribor to shore up faith in the euro benchmark, sources familiar with the matter told Reuters.
Singapore, Hong Kong and Japan announced reviews of the way interbank benchmark rates were set in the Asian financial centers, while in South Korea the anti-trust agency widened a probe into possible rate-fixing.
Read more: http://www.reuters.com/article/2012/07/19/us-banking-libor-idUSBRE86H1IV20120719
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