A recent report by Martin Wheatley, an official at the U.K.Financial Services Authority who's in charge of reforming Libor,suggests that the benchmark rate will continue to be based onbanks' funding costs, according to the Wall StreetJournal. But instead of relying solely on banks' estimates ofthose costs, regulators are likely to require that banks show asmany transactions backing those estimates as possible.
The WSJ argues that Libor isn't likely to be replaced by someother measure because there's no other rate that would work for allthe financial instruments that use Libor, and because reworking allof the many derivatives contracts currently based on Libor would bea huge job.
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