King put Libor reform on c'banker meeting agenda-source

LONDON, July 18 Thu Jul 19, 2012 12:31am IST

LONDON, July 18 (Reuters) - Bank of England governor Mervyn King has put the reform of Libor on the agenda for the next bi-monthly meeting of global central bankers in September in Basel, a central bank source said on Wednesday.

The governor had sent a letter to top central bankers of the Economic Consultative Committee, putting Libor reform on the agenda, the central bank source said.

King said in the letter that "very clear that radical reforms of the Libor system are needed", the source said.

The governor has already said that he would put the Libor issue on the agenda of the bi-monthly meeting of global top-central bankers at the Bank for International Settlements (BIS) in Basel.

"When I meet with my central bank colleagues in September in Basel ... I will put on the agenda the discussion of the future arrangements of this sort of benchmark," he told a parliament committee on Tuesday.

King is the chair of the Global Economy Meeting and the Economic Consultative Committee, two forums of the world's leading central bankers.

The Libor-rigging scandal has been rocking London's reputation as a banking centre. British bank Barclays was fined $453 million last month by U.S. and UK authorities for manipulating the London Interbank Offered Rate (Libor), the short-term interest rate that is supposed to show the price at which major banks are willing to lend to each other.

The Bank of England has come under fire for not taking more decisive action when the New York Federal Reserve voiced concerns about flaws of Libor were raised in 2008.