The new-look Libor is essential for London’s success as a financial centre
Martin Wheatley published his final report into Libor this morning, concluding that though the rate should stay for practical reasons, it needs someone to ‘press the reset button’. It would have sent a strong message out to scrap the rate and replace it with something new, but Wheatley feared that doing so would ‘pose an unacceptably high risk of significant financial instability, and risk large-scale litigation between parties holding contracts that reference Libor’. In other words, a rate whose failings caused chaos in the banking world would cause even more chaos if it disappeared. The report also noted that though significant damage has been done to its reputation, there has
