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BBA statement regarding emails released by the Bank of England

20 Jul 2012

In respect of the BBA 2008 consultation document on LIBOR

The BBA said:

"In its emails the British Bankers' Asociation was drawing the attention of the Bank of England to the need for strong governance being a feature of the BBA's Libor consultation and the BBA's desire that the Bank of England should play a formal role in the process going forward. The BBA was proposing that a similar invitation be extended to the FSA and to other key central banks. The involvement sought was their presence at the independant FX and MM committee. The view of the BBA was that, given the importance of LIBOR, a formal role for the Bank of England and others was a necessary part of the future governance process and we were requesting their assistance.The Bank declined and we understood that they had discussed this issue with other authorities as well. At their request this reference was therefore removed from the document.

"As part of the emails the Bank has released, it is also clear that the BBA brought to the Bank's attention its concerns about the need to find ways of ensuring that Libor rates were set by a contributing bank in accordance with the definition. As has been widely reported, the market at that time was dysfunctional. In this request we were again responding to growing concerns in the market - also well known to the authorities. It was the view of the BBA that the Bank had a material role in assisting in this area for the long term."

 
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