Changes to the way LIBOR is determined in the UK are continuing. The administration of LIBOR is now an activity regulated by the Financial Conduct Authority (FCA). Knowingly or deliberately making false or misleading statements in relation to its setting is a criminal offence.
To make it more likely that the rates submitted are underpinned by real trades, there has been a reduction in the currencies and maturities for which LIBOR is quoted. Since 1 July 2013 each individual submission of rates by a panel bank is embargoed for three months to reduce the motivation to submit a false rate to show creditworthiness. The Interim LIBOR Oversight Committee has introduced a new Code of Conduct for Contributing Banks.
In early 2014 NYSE Euronext Rates Administration Limited, a London based company regulated by the FCA, will take over the administration of LIBOR from the British Bankers Association.
These changes, as well as other issues, such as the possibility of LIBOR being a negative rate, are having an effect on the way in which LIBOR is defined and dealt with in financing agreements.
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