U.S. Commodity Futures Trading Commission Chairman Gary Gensler raised fresh doubt about Libor's integrity as a market benchmark, saying banks' reported borrowing costs remain distorted.
On 85 percent of occasions in 2012, the 18 firms that contribute to dollar Libor left the rate at which they said they could borrow in the interbank market unchanged, even as the cost of insuring their debt against default using credit-default swaps soared, Gensler, 55, said in a speech at the City Week conference in London today.
"This was during a period when there were a number of uncertainties in the market driven by elections, changing economic outlook and other events," Gensler said. "And yet somehow these banks said they could still borrow at exactly the same rate for four to five months."
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