With banks currently concerned over legal liability, the system should be such as to encourage or even require banks to continue to participate in the data gathering process. Given the low volume of transactions taking place in the interbank market the ACT supports a widening of the LIBOR definition to have regard to the rates banks pay on their funding from the wider wholesale money markets. Although being based on actual rates paid the process must allow for some judgment and adjustment for unrepresentative transactions or for currencies and maturities where trading activity is minimal. There is acceptance that the range of currencies and maturities covered will reduce.
Ideally any changes should refine the existing process and strengthen the governance, but if more substantial changes are proposed then allowance should be made for an orderly transition process to the new LIBOR.