By Louise Egan and William Schomberg
WASHINGTON, April 18 (Reuters) - Global regulators will provide more clarity in a year's time on guidelines for financial benchmarks like Libor, Bank of Canada Governor Mark Carney said on Thursday, after a global rate-rigging scandal led to calls for reform of the system.
Finance officials from the Group of 20 major economies plan to task the Financial Stability Board (FSB) - which Carney heads - with overseeing the reform of such benchmarks, two sources familiar with the situation told Reuters.
Carney also said the FSB, which coordinates regulators worldwide, might have a coordinating role in ensuring that any reforms to reference rates around the world live up to standards of transparency and good governance.
When asked how long it would take, he said it would probably be done by "next spring."
"I suspect this will consume a fair bit of time, and appropriately so, over the next year or so," he said at a Reuters Newsmaker event in Washington.
Authorities have probed more than a dozen banks in Europe, Japan and the United States over suspected rigging of the London interbank offered rate, or Libor, used in financial contracts worth hundreds of trillions of dollars globally.
Barclays, Royal Bank of Scotland and UBS have all been fined for manipulating Libor, and regulators this week came out with a wide set of standards such widely used benchmarks should meet.
Carney said it was ultimately up to the private sector to decide whether to change the rate-setting system, with policymakers setting the bar for good conduct.
"We have to look at whether there are alternatives - the collective we - and we have to look at the potential costs and mechanisms for transition and if they are clearly superior," he said. "I think there's a role for the public sector in that, a role for the FSB potentially," he said.
An early draft of a communique G20 financial officials will be debating for release on Friday asks the FSB to take on the role of overseeing this work, the sources said.
The International Organization of Securities Commissions (IOSCO) issued a report this week calling for more effective whistle blowing mechanisms, a code of conduct for individuals who submit figures for benchmarks and stronger policing of institutions that compile rates.
IOSCO said it was opening a consultation period on its proposals, which cover everything from equity swaps to currency and commodities exchanges, as well as interbank rates and overnight lending.
Carney said market players and policymakers should give "serious consideration" as to whether global benchmark rates should be based on actual transactions rather than estimates.
The rate is now compiled by banks submitting quotes for the rates at which they believe they could borrow from another bank.
In another thorny issue on the financial reform agenda, Carney said he would try to solve a brewing international conflict over how to supervise jointly the $650 trillion derivatives market.
"I'll have some bilateral discussions over the course of this weekend on exactly those issues, and we would like to see them resolved by the time leaders meet," Carney said, referring to a Group of 20 summit in September in Russia.
The top U.S. derivatives regulator wants foreign banks to stick to the same rules for trading swaps as domestic firms, but the European Union, Britain and Japan have all urged it to rely more on foreign regulators.
A group of U.S. Congress members across the political divide has chided the Commodity Futures Trading Commission over its aggressive stance, as has EU financial services chief Michel Barnier.
"It will take some leadership within each of those jurisdictions to come to an agreement, but I think the will is there," Carney said.