WASHINGTON – A group of top U.S. regulators says the manipulation of a key global interest rate poses a risk to U.S. financial stability and are urging officials worldwide to work together to find an alternative to the rate.
The Financial Stability Oversight Council made the recommendation in its annual report issued Thursday. The regulators’ group, which includes Treasury Secretary Jack Lew and Federal Reserve Chairman Ben Bernanke, also identified financial disruptions caused by cyberattacks or technological failures as potential threats.
The London Interbank Offered Rate, or Libor (LY’-bor), provides the basis for trillions of dollars in contracts around the world, including mortgages and consumer loans.
U.S. and British regulators have fined two big British banks and Switzerland’s largest bank hundreds of millions of dollars for manipulating Libor.