LIBOR is kept under constant review by its board and an independent technical oversight committee. The last review was held in 2008-09. It included an open and wide-ranging consultation on all aspects of the design and calculation of LIBOR from which evolved the calculation and governance of the rates precisely in line with that which the market had asked.

Contributing banks submit their rates directly and confidentially to Thomson Reuters who undertake the calculation and publish the Libor rates at midday every London business day. There are investigations going on against some allegations about the major banks manipulating the LIBOR.

BBA Libor has today [Wednesday 28 March 2012] set out the next steps for the consultation on a number of technical issues. The BBA, the contributing banks and users of the rate are continuing their efforts for evolution of Libor so that it adapts to meet the changing market and user requirements and general expectations.

The review will consider three broad areas:

  1. The financial instruments included for the purposes of defining the rate;
  2. A rigorous code of requirements for all contributors; and
  3. Strengthening the statistical underpinning of the contributions.

The consultation will be led by an industry steering group including Barclays, Credit Suisse, HSBC, Lloyds, RBS, CME. Other users and contributors of the rate will be asked to participate. The Authorities such as the UK Treasury, Bank of England and the Financial Services Authority will be kept fully informed throughout the process. The independent Foreign Exchange and Money Market Committee (FX and MM committee) will also be playing an active role in the consultation.

Thomson Reuters said:

We welcome this announcement and will continue to support the BBA and the financial community in the calculation and distribution of LIBOR.

The BBA said:

The British Bankers’ Association has always kept Libor under review and we periodically consult the market and other interested parties on refinements they would like to see. We will keep all interested parties informed as we go forward. Any recommendations arising from the exercise will be shared in full consultation with regulators and users.