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US regulator says it's time to change LIBOR system

Associated Press Modified: September 24, 2012 at 1:00 pm •  Published: September 24, 2012

WASHINGTON (AP) — A top U.S. regulator is calling for an overhaul of a key global interest rate, saying consumers need more confidence that the rate is set honestly and transparently.

Gary Gensler, chairman of the Commodity Futures Trading Commission, told a European Parliament committee Monday that the process for setting London Interbank Offered Rate, or LIBOR, should change.

"It is time for a healthy benchmark," Gensler said in a speech delivered via live video to the committee. "It is time to restore the confidence of people around the globe that the rates at which they borrow and lend money and hedge interest rates are set honestly and transparently."

Gensler's remarks come months after Britain's Barclays bank admitted that it had submitted false information for LIBOR. Barclays agreed to pay a $453 million fine in settlements with the CFTC, U.S. prosecutors and British regulators.

Several other major banks, including Citigroup Inc. and JPMorgan Chase & Co. in the U.S., are also being investigated. U.S. congressional committees also are looking into possible manipulation of the LIBOR.

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