CALGARY, Alberta (Reuters) - Central bankers will not reach any decisions on what to do about the scandal-hit Libor rate, a benchmark reference rate for global short-term interest rates, when they meet this weekend in Basel, Switzerland, Bank of Canada Governor Mark Carney said on Friday.
“The discussions this weekend will be necessarily preliminary,” Carney, who is also chairman of the Group of 20’s Financial Stability Board, told reporters after a speech in Calgary.
Bank of England Governor Mervyn King put the Libor issue on the agenda of the Sunday meeting of the Economic Consultative Committee of global central bankers because a rate-rigging scandal has called the integrity of Libor, the London Interbank Offered Rate, into question.
Carney said the central bankers would look at “a broader range of reference rates across a range of jurisdictions” One of the important inputs into eventual decisions will be a report by Martin Wheatley, managing director of Britain’s Financial Services Authority, and that’s not due till late September.
“We’re not going to front-run the very important and good work that, for example, Martin Wheatley is doing in the UK,” Carney said.
Libor, calculated from submissions by commercial banks, is used to determine interest rates on more than $500 trillion of contracts globally. Financial authorities are considering how to restore confidence in Libor, or whether it needs to be replaced altogether.
Reporting by Scott Haggett; Writing by Randall Palmer in Ottawa; Editing by Peter Galloway