Central bankers will join Bank of England Governor Mervyn King in September for a meeting on the possible future of the London interbank offered rate, with talks to be followed the next week by discussion among policy makers at the Financial Stability Board.
King suggested the meeting in a letter to his colleagues on the Economic Consultative Committee, an informal body that includes governors from the Bank for International Settlements, the BIS general manager and central bankers from India and Brazil.
“Discussions will begin amongst governors when they next meet on September 9th (as suggested in Governor King’s letter),” said Jeremey Harrison, spokesman for Bank of Canada Governor Mark Carney, who is also chairman of the FSB. The talks will “continue with supervisors, regulators, central banks and treasuries at the FSB when its Steering Committee meets the following week,” he said.
At least a dozen banks are being probed by regulators worldwide for potentially rigging the benchmark rates for at least $500 trillion of securities.
The FSB will consider alternatives to Libor, Carney said yesterday, adding he hasn’t done a broad consultation with the group’s members. Central bankers have already discussed “a coordinated global initiative to quickly and effectively restore the integrity of this vital process,” Harrison said.
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