The British Bankers’ Association on Thursday brushed off suggestions that a measure of US bank rates being set up by Icap, the interdealer broker, could displace the London interbank rate as a global benchmark for borrowing costs. Angela Knight, BBA chief executive, said that Libor – now the subject of intense debate - still had the banking community’s “support and commitment”. Icap’s alternative US rate benchmark, which starts next week, will use the New York Funding Rate as a guide to where banks see one- and three-month rates during New York’s trading day. The WSJ meanwhile reports that central banks on both sides of the Atlantic are viewing Libor as a “major source of stress” in surging interest rates on banks’ dollar-borrowing in money markets.
