As anticipated by FedFin when the LIBOR case broke (see Client Report LIBOR), global regulators are now engaged in a high-level effort to find a new benchmark rate.  Stung by criticism, U.K. regulators are taking the lead, with the most senior market regulator there today detailing options under active consideration.  As these will drive U.S. markets and affect the early-September Basel negations, this report reviews pending U.K. action.  Most importantly, these include a consultation paper on LIBOR options, the first chance global institutions and market participants have had formally to comment not just on LIBOR, but also on broader benchmark rates.  Whichever course is finally adopted, the U.K. paper details major changes in rate-setting governance and penalties that it believes should accompany the new procedures.  Comments on the consultation are due by September 7.

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