Of Special Interest
Filters
- Newslink Trends-The Global Strategic Perspective
- Juniper Research says digital wallet users to exceed 4.4 billion by 2025, as mobile drives digital payments’ revolution
- Criminals exploit COVID-19 pandemic with rise in scams targeting victims online
- Equifax says Open Banking proving pivotal to pandemic lending
- Consumer confidence in banks, credit card providers and investments remain stable as demand supercharges digital finance says Toluna research
- Mintos says Europeans are starting to embrace investing
- US banks see IT modernisation as a way to improve customer experience
- Risk mitigation in global trade depends on digitisation-Andrew Raymond, CEO, Bolero International comments
- Juniper Research new study says the volume of B2B payments facilitated by non-banks will exceed 53 billion in 2022, from a COVID-related low of 38 billion in 2020
- CMA issues fifth publication over 3 years of the service quality league table of personal and business current account providers
- Barclays says scammers take advantage of COVID-19, cashing in on nations’ uncertainty
- S&P Global report says financial market infrastructure sector's earnings likely to cool off In second half
- Global banking market capitalisation slumps by over 30% amid pandemic says Buyshares research
- Digital wallet spend in Europe & North America to increase by 40% in 2019, finds study
- Juniper forecasts mobile money transactions will exceed 200 billion by 2024
- Banks can save the world from climate change, says former UN climate chief
- Research by NatWest reveals gender divide over attitudes to saving
- Europe’s big bank problem: too much capital is trapped in the US, says Scope
- Later-Life lending market set to almost double in the next 10 years, finds report
- Barclays/Cebr report challenges nation to think differently about wealth
- Fifth of UK investors looking to debt investment, new research reveals
- Regtech will play a more important role in PSD2, says Mitek
- Banks turn to Fintech partnerships to improve customer experience, finds Fraedom
- New industry code to tackle fraud must deliver, says Which?
- New TTF report highlights loss of trust in financial services
- Arxan highlights financial app vulnerability epidemic
- SAS asks whether banks really need to choose between operations and innovation
- Which? raises alarm as almost 1,700 free ATMs become fee-charging
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
24th July 2012
Libor, the BBA and Thomson Reuters
Opinion
An impression has been given by some media, politicians and even some regulators that Libor has been calculated and conducted in some amateur or casual way. Secondly that the 2008 reforms to the calculation were not of consequence.
It is not widely known that the calculation of the Libor rates has been contracted out by the British Bankers Association to Thomson Reuters for many years. It has been Thomson Reuters responsibility to ensure all the necessary input information from the panel member banks was obtained. Amongst the changes made in 2008 was the questioning of a submitter should a bank's submission show unexpected variance. Specifically if:
"- submissions are more than two standard deviations from the previous fix for that maturity.
- the submissions should move the contributor from materially above to materially below the fix, or vice versa.
- any submissions that are more than approximately 5bp higher or lower than the previous submission, unless the majority of the rest of the panel have also moved the same amount in the same direction. In this latter case, Thomson Reuters will provide the data and the LIBOR manager will investigate the nature of such a market-moving event and discuss with the FX & MM Committee."
Elsewhere the 2008 changes paper goes on to detail:
"If a submitted rate triggers a query, Thomson Reuters will immediately contact the bank in question and ask it to confirm its rate. Contributions that do not conform to the expected norms are usually a result of an error that is quickly rectified. This is an extension of current practice. If a bank confirms that it intends to submit a rate that would still trigger an alert, Thomson Reuters will contact the LIBOR manager who will ask the bank its reasoning for the submission. Each time this occurs, the LIBOR manager will log the circumstances and include full details in the regular report to the FX & MM Committee. Discussion of this report will be a standing agenda item at Committee meetings. Details of the report and discussions thereof will be confidential, and members may not disclose any information outside the committee meetings.
"If, in the view of the LIBOR manager, a bank’s submitted rate is aberrant or the bank’s explanation for its submission is unsatisfactory, the LIBOR manager will inform the Fixings Sub-committee who will meet to consider the issue"
An internet feedback page where any professional could question a rate they felt did not reflect the true market position. In addition Clifford Chance was employed to review the process from a legal point of view.
How the 2008 changes worked in practice should be of key interest to the Treasury Select Committee and its investigation into Libor manipulation. Angela Knight, Chief Executive, recently left the BBA after five years in the role. It has just come to light that John Ewan, Libor manager for some years has also departed the organisation. The BBA is to defer appointing a replacement until after the investigations into manipulation. One of Ewan's former deputies is to take on the responsibility. The BBA was not revealing his name.