ICE Benchmark Administration (IBA), an autonomous entity within IntercontinentalExchange Group, will become the administrator of the London Interbank Offered Rate (LIBOR) on February 1, 2014, as confirmed by the U.K.’s Financial Conduct Authority (FCA).
Following several investigations into manipulation by banks setting LIBOR, which was previously administered by the British Bankers’ Association (BBA), U.K. authorities identified the need for a new independent administrator for LIBOR, and IBA was recommended as such in July 2013. Since then, IBA has been working with BBA, industry organizations and stakeholders to ensure a smooth transition, and to accomplish this, there will be no change to the calculation of LIBOR for the time being.
The IBA’s Oversight Committee will administer the LIBOR code of conduct, and the committee will be composed of benchmark users, independent experts, benchmark submitters, the IBA board and other stakeholders.
The IBA has also made two new appointments. André Villeneuve, previously the chairman of the City of London’s International Regulatory Strategy Group, will serve as chairman of IBA. Joanna Perkins, who currently serves as the chief executive of the Financial Markets Law Committee (FMLC), will also serve as chairperson for the Oversight Committee.
In order to administer the rate, IBA has developed new surveillance methodology designed to adjust to changing market conditions and says it will employ analytical tools to provide transparency to the rate setting process. As result, IBA says it will be easier to identify errors or potential misconduct.
“LIBOR is of fundamental importance to the global financial markets and it is vital that market participants have full confidence in the integrity of the rate,” says Finbarr Hutcheson, president, ICE Benchmark Administration. “With the support of market participants, regulators and stakeholders, and through enhanced checks and controls, IBA will work collaboratively to ensure full confidence in LIBOR. I am pleased to welcome André Villeneuve and Joanna Perkins to IBA.”