CFTC Chief Pushes EU On Transaction-Based Libor Substitute

Law360, New York (September 24, 2012, 4:47 PM EDT) -- The top U.S. futures regulator on Monday renewed his call to replace the scandal-ridden London interbank offer rate as the key interest rate with a new system based on real, “observable” transactions.

U.S. Commodity Futures Trading Commission Chairman Gary Gensler said that because Libor was based largely on estimates of the price banks pay to borrow from other banks, it was open to manipulation. Because Libor is used to set everything from the prices on derivative contracts to the rates borrowers pay on adjustable rate mortgages...
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