The British Bankers' Association is to make a raft of changes to strengthen LIBOR, which measures the real rate at which banks lend to each other.
Measures announced today come as the benchmark has been under increasing stress following the fall-out from the credit crunch.
Proposed changes include a tighter scrutiny of contributor banks and the proposed expansion of the membership of LIBOR’s governing body and its panels.
The BBA will also take soundings on whether the historically transparent rate-setting mechanism is stigmatising contributors and whether a second rate-fixing process for US dollar LIBOR might be set after the US market opening.
BBA chief executive Angela Knight says: "BBA LIBOR has stood the test of time: it has been published on every business day since 1985 and is among the most transparent indices in the world. These changes will further strengthen BBA LIBOR and the confidence of its many users."
BBA LIBOR (The British Bankers' Association London Interbank Offered Rate) is the most widely referenced interest rate index in the world and is used to set rates for financial products worth around $350trn.
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