Wall Street beats the City in bidding war to run Libor

 

The New York Stock Exchange yesterday beat off the London Stock Exchange in the bidding to run the disgraced Libor benchmark, triggering howls of protest in the UK at yet another "capitulation" to the might of Wall Street.

As US financial news networks ran wall-to-wall headlines declaring "London loses Libor", MPs responded with shock that such a key indicator for the global financial markets was now to be run by New York.

The decision was made by a committee led by City grandee Baroness Hogg, whose daughter Charlotte has just taken up office as Mark Carney's chief operating officer at the Bank of England. She said the award to NYSE Euronext would "play a vital role in restoring the international credibility of Libor".

John Mann, a Labour MP on the Treasury Select Committee, said: "This is a wholesale surrender. Because the Government did not get on top of this scandal and the regulator messed around, we let America take the lead on investigating Libor fixing and they are now getting the prize."

The Serious Fraud Office originally declined to investigate the Libor scandal, while the Financial Services Authority was seen as having been sluggish to act, giving the impression that Wall Street's watchdogs were making all the running.

In one concession to the UK, the rate will be physically based in NYSE's London headquarters and regulated by the Bank of England's Financial Conduct Authority. There are no current plans to change the name. At present, Libor, whose very name – the London Interbank Offered Rate – denotes its British heritage, is issued by the British Bankers Association after being collated by Thomson Reuters. It will be replaced by a new company, NYSE Euronext Rate Administration, early next year.

As well as the London Stock Exchange, data companies Thomson Reuters and Markit are also thought to have bid. In addition to collating and distributing the Libor data, NYSE will also issue new guidelines to banks about how they should calculate the rates they submit.

In the scandal, it emerged that banks were colluding with each other to fix their Libor submissions up or down in order to hit certain targets.

The contract award follows growing concern in the UK that the US regulators have been using the financial scandal as a way of securing more power for Wall Street.

NYSE paid a nominal £1 for the contract and will now license its use to customers, as it does with other benchmarks it operates, such as the French shares index, the CAC-40.

A comparison of the charges from the US and the UK laid against Tom Hayes, currently on trial in London over the Libor scandal, show how the US action makes no mention of the Wall Street banks he worked for. The UK charges cite his work at Citigroup and his alleged conspiring with JPMorgan.

Suggested Topics
Voices
Stephanie first after her public appearance as a woman at Rad Fest 2014
voices

Arts and Entertainment
Banksy's 'The Girl with the Pierced Eardrum' in Bristol
art'Girl with the Pierced Eardrum' followed hoax reports artist had been arrested and unveiled
Voices
Oscar Pistorius is led out of court in Pretoria. Pistorius received a five-year prison sentence for culpable homicide by judge Thokozile Masipais for the killing of his girlfriend Reeva Steenkamp
voicesThokozile Masipa simply had no choice but to jail the athlete
Life and Style
tech

Board creates magnetic field to achieve lift

PROMOTED VIDEO
News
Russell Brand at an anti-austerity march in June
peopleActor and comedian says 'there's no point doing it if you're not'
News
i100
Arts and Entertainment
James Blunt's debut album Back to Bedlam shot him to fame in 2004
music

Singer says the track was 'force-fed down people's throats'

News
news

Endangered species spotted in a creek in the Qinling mountains

Life and Style
tech

Company says data is only collected under 'temporary' identities that are discarded every 15 minutes

News
Bryan Cranston as Walter White, in the acclaimed series 'Breaking Bad'
news
News
ebooksAn unforgettable anthology of contemporary reportage
News
peopleJust weeks after he created dress for Alamuddin-Clooney wedding
Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Life and Style
health

Some experiencing postnatal depression don't realise there is a problem. What can be done?

Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album