The Bank of
England (BoE) has revised its proposals for reforming how a benchmark
for lending between banks is calculated, as part of its attempts to
stamp out the manipulation of key reference points for financial
contracts.
The BoE
also said on Thursday it would push back implementing the changes to
March or April 2018, rather than the end of this year, as previously
stated.
In a consultation paper published last year, the BOE said the methodology for calculating the Sterling Overnight Index Average (SONIA) should be based on the average rate using a volume-weighted median, rather than the volume-weighted mean used currently.
In a supplementary consultation paper published on Thursday, the BoE said a so-called "trimmed mean" approach, not part of the first consultation, would be better.
SONIA has been considered as an alternative for some contracts to the London Interbank Offered Rate (LIBOR), a global benchmark for around $450 trillion of contracts that has been tainted by a market-rigging scandal.
In a consultation paper published last year, the BOE said the methodology for calculating the Sterling Overnight Index Average (SONIA) should be based on the average rate using a volume-weighted median, rather than the volume-weighted mean used currently.
In a supplementary consultation paper published on Thursday, the BoE said a so-called "trimmed mean" approach, not part of the first consultation, would be better.
SONIA has been considered as an alternative for some contracts to the London Interbank Offered Rate (LIBOR), a global benchmark for around $450 trillion of contracts that has been tainted by a market-rigging scandal.
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