After being rigged by some of the world's biggest financialinstitutions, the London interbank offered rate, the benchmark formore than $300 trillion of securities and loans, is nowincreasingly being set by a smaller group of banks.

Bank of America Corp., Citigroup Inc. (C), Bank of TokyoMitsubishi UFJ Ltd., Royal Bank of Canada, Sumitomo MitsuiFinancial Group Inc. and Lloyds Banking Group Plc (LLOY)'ssubmissions have been used in setting the rate on an almost dailybasis in the past four months, data compiled by Bloomberg show. Twoyears ago, none of the 18 designated lenders made it into everyfixing of the measure, which excludes outliers by stripping out thefour highest and lowest contributions.

“You have a core group setting the rate and that's a majorconcern,” said Bret Barker, a money manager at Los Angeles- basedTCW Group Inc., which oversees $128 billion. “It's going to be verytough to fix that and very tough to replace Libor.”