LONDON--The London interbank offered rate won't be controlled by
London much longer.
Libor, the controversial benchmark that underpins interest rates
on trillions of dollars in financial contracts, is being sold to
NYSE Euronext (NYX), the company that runs the New York Stock
Exchange, according to people familiar with the matter. An
announcement of the deal, whose financial terms weren't immediately
clear, is expected Tuesday, these people said.
Since its inception in the 1980s, Libor has been run by the
British Bankers' Association, a London-based trade group whose
members are some of the world's biggest banks. But the rate has
been engulfed in scandal in recent years, due to attempts by a
number of banks to manipulate the rate for their own financial
gain. Three banks have settled rate-manipulation charges, agreeing
to pay a total of roughly $2.5 billion in penalties to U.S. and
British regulators.
Starting last year, British authorities started looking for a
new owner for Libor, after concluding that a bank-lobbying group
shouldn't be responsible for administering a key benchmark. Among
the companies that said they were interested in taking over the
entity that runs Libor was Thomson Reuters.
The U.K. Treasury is expected to announce the move later
Tuesday, according to the people familiar with the matter.
While ownership of Libor will cross the Atlantic, responsibility
for regulating it will remain in the U.K., according to one person
familiar with the matter.
Spokeswomen for NYSE Euronext, which is based in New York, and
the BBA declined to comment. A U.K. Treasury spokesman couldn't
immediately be reached for comment.
-Cassell Bryan-Low contributed to this article.
Write to David Enrich at David.Enrich@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires