NYSE Euronext reportedly won a contract to take over Libor.
LONDON (CNNMoney)
The British Bankers' Association, which had been administering the London interbank offered rate for decades, came under fire during a rate-rigging scandal that had a knock-on effect on loans and derivatives around the globe.
The U.K. Treasury said it made the decision to give NYSE Euronext the power to run Libor following a competitive bidding process.
"This change will play a vital role in restoring the international credibility of Libor," said Baroness Hogg.
Libor is a collection of rates generated for various currencies across 15 different time periods. The quotes are used as benchmarks for roughly $10 trillion in loans and some $350 trillion in derivatives. For example, an adjustable-rate mortgage might require you to pay interest based on a Libor rate plus 2%
Related: Oil price manipulation: The next Libor?
The Libor scandal led major banks, including UBS (UBS) and Royal Bank of Scotland (RBS) to pay well over $2 billion in penalties after admitting to manipulating interest rates.
At least 10 firms in the financial services sector have been linked to the rigging case and individual traders are now facing criminal charges in court.
Barclay (BCS)admitted to manipulating Libor to appear stronger during the financial crisis, deliberately understating its borrowing costs, and to benefit trading positions tied to the rate. It paid $450 million as part of a settlement with U.S. and U.K. regulators.
U.S. Assistant Attorney General Lanny Breuer called the case "one of the most significant scandals ever to hit the global banking industry."
The British Bankers' Association said it would work to ensure Libor was smoothly transitioned over to NYSE Euronext.
First Published: July 9, 2013: 8:06 AM ET
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