King calls for LIBOR reform after Barclays debacle

Bank of England governor Sir Mervyn King has called for the current LIBOR system to be overhauled following the Barclays debacle.

Speaking at the release of the latest Financial Stability Report, King said the current LIBOR process would have to change following the revelation a number of banks had manipulated it to make additional profits. King said: "The time has come to move LIBOR towards observations based on actual market transactions." Such a move would be a big step change away from the current system based on estimates. King added the idea that "my word is my Libor" was now dead after Barclays was issued with a record £59.5m fine for trying to manipulate the London interbank offered rate. In total ...