Central Banks Propose Several Rates Over Libor Alone

“LONDON (Reuters) – The tarnished Libor interest rate benchmark should be replaced with a range of reference rates based on actual market transactions by banks, a global group of central bankers said on Monday.

Barclays , Royal Bank of Scotland (RBS) and UBS have all been fined for rigging the London interbank offered rate, which regulators are now reforming.

The rate is compiled by banks submitting quotes for the rates at which they believe they could borrow from another bank. It is used to price products worth trillions of dollars, ranging from home loans to credit cards, but central bankers signaled that its days ought to be numbered.

“It is clear that central banks must play an important role in supporting the development of alternative reference rates,” Bank of England Governor Mervyn King said in a statement.

King chairs a committee of central bankers at the Bank for International Settlements, which on Monday published a report on the role central banks could play in creating a choice of rates….”

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