Benchmark Rates Should Reflect Real Data, Iosco Says

Global regulators want rates to be based on ‘observable transactions.’

Global regulators said interbank lending rates and other so-called market benchmarks should be based on data from actual trades in a bid to restore credibility of indexes tarnished by price-fixing scandals.

A panel led by U.S. Commodity Futures Trading Commission Chairman Gary Gensler and U.K. Financial Conduct Authority Chief Executive Officer Martin Wheatley is also pushing for banks involved in benchmark setting to sign up to a code of conduct as part of a drive to make the process more robust.

Libor Undermined

The move follows concerns expressed by regulators that Libor was undermined in part because banks submit estimates for how much it would cost to borrow from each other, rather than real transaction data.

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