Proposed reforms in the way Libor is compiled could lead to morevolatility in short-term bank funding, Reuters reports.
On Friday, British regulators unveiled a proposed overhaul thatincludes increasing the number of banks that submit data andrequiring banks to back up estimates with information about othermarket rates.
JPMorgan money market Alex Roever notes that after Barclaysreached a settlement with the U.S. Commodity Futures TradingCommission, a settlement that required it to substantiate itssubmissions by citing other rates, the volatility in its Liborsubmissions increased.
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