FSA suggests LIBOR should be scrapped

The UK watchdog fired the starting shot on a dramatic overhaul of key benchmark borrowing rates with a package of proposals designed to restore trust following the recent LIBOR scandal.

The head of conduct regulation for the Financial Services Authority who has been asked by the government to review LIBOR, said the existing structure and governance of the rate is "no longer fit for purpose" and must be fixed.

The suggestions for reform include scrapping LIBOR altogether and replacing it with a borrowing rate based on actual trades, which could be overseen by a new independent body rather than the British Bankers' Association ... READ MORE

Released by the Financial Times - 9 August 2012