LONDON (AFP) - A dual-track system combining survey-based rates and objective data is set to replace key global interest rate Libor, the Financial Times reported on Monday.
Mr Martin Wheatley, the British regulator leading attempts to reform the scandal-hit interest rate system, told the FT that the new scheme would protect those with products already tied into the existing system.
"You can't just say: 'Forget about yesterday's problems, we'll just move to the future'," he said.
"If you change the definition, it's almost certain that one side of every one of those trades would lose out and then would say: 'We're no longer bound by this'," he added.
Barclays, Royal Bank of Scotland and UBS have paid over US$2 billion (S$2.5 billion) to settle allegations they manipulated Libor to their advantage or hide their financial strains during the 2008 credit crunch.
Libor, or London Interbank Offered Rate, is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money.
Libor is calculated daily, using estimates from banks of their own interbank rates, and affects the pricing of more than US$300-trillion of contracts across the world, according to regulators.