A key interest rate for more than $500 trillion of securities worldwide will be replaced by a benchmark subject to greater government control, according to a plurality of global investors.
Forty-four percent of those responding to a quarterly Bloomberg Global Poll said the London interbank offered rate, known as Libor, will be supplanted by a more regulated model within five years. Thirty-four percent predicted the rate will continue to be set by banks in the current fashion, while 22 percent said they didn't know.
Confidence in Libor has waned as authorities investigate whether financial firms rigged the rate to profit on derivatives positions and hide how difficult it was for them to borrow money during credit-market turmoil in 2008.
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