• 5 Oct 2012

Thomson Reuters Role in the Calculation and Distribution of LIBOR

Information on the data aggregation, calculation and publication process for the London Interbank Offered Rate

London skyline Caption|REUTERS/Toby Melville

LIBOR – the London interbank offered rate – is used to price trillions of dollars worth of contracts from simple mortgages to complex derivatives. Thomson Reuters is the official calculation and distribution agent for LIBOR. This role has been performed under the auspices of the British Bankers Association since 2005, when Thomson Reuters acquired Telerate, the original calculation agent since the benchmark’s inception in 1986.

The FSA’s Wheatley Review on 28 September 2012 recommended that the BBA no longer sponsor LIBOR. Thomson Reuters will continue to support the ongoing calculation and distribution of LIBOR through a transition phase determined by the governments endorsement of the review and will implement changes as they are recommended.

Frequently asked questions

Does Thomson Reuters have a comment on the Wheatley Review findings announced on 28 September 2012?

Thomson Reuters welcomes FSA managing director Martin Wheatley’s recommendations on LIBOR. Mr Wheatley’s review identified a number of positive solutions which are aligned with our earlier submission to the review committee. Acting to prevent further manipulation is essential and regulators are rightly taking action against such abuse. Thomson Reuters is committed to actively participating with the financial industry in the transformation of LIBOR with Mr Wheatley and others for the good of the financial markets and the public as a whole. Thomson Reuters is also committed to supporting the ongoing calculation and distribution of LIBOR while regulators and governments conduct the reviews, and will implement the improvements that are recommended.

The Wheatley Review’s report recommended that individual bank contributions be removed from the daily publication. How soon will the individual contributions be removed from the daily reporting?

We are waiting for the UK government to endorse the Wheatley’s recommendations and are confident that this can be introduced very shortly thereafter. We therefore await guidance from the regulators.

The Wheatley Review recommended reducing the number of currencies and tenors which in effect will reduce LIBOR from 150 to 20 rates a day. Do you support this and when will it be implemented?

Thomson Reuters was involved in the consultation and this is, in fact, exactly in line with what we recommended. We expect these currencies and tenors to be phased out carefully and in consultation with the relatively few users of those specific LIBOR benchmarks.

Is Thomson Reuters interested in bidding for the LIBOR administrator role?

Thomson Reuters is considering its options.

Contact Details

Reporters seeking more information should
contact Yvonne Diaz
Email
Tel: +44 20 7542 2615