(Adds more detail)
By Huw Jones
LONDON, Dec 8 (Reuters) - Banks failing to meet targets for
ditching Libor interest rates next year will face tougher
regulatory scrutiny, Britain's Financial Conduct Authority (FCA)
said on Tuesday.
Scrapping Libor is the biggest task faced by markets in
decades, involving a rate used to price home loans, credit cards
and company borrowing worth about $400 trillion globally.
Libor, as the London Interbank Offered Rate is known, is
being scrapped at the end of 2021 for new financial contracts
after banks were fined for trying to rig what was once dubbed
the world's most important number.
"In the UK at least, supervisors are tracking progress
against those targets," Edwin Schooling Latter, the FCA's head
of markets policy, said, adding it was now clear there should be
no new Libor business after the end of 2021.
Regulators such as the FCA have set out interim targets
ahead of that date, such as no longer using sterling Libor for
pricing new loans after the end of the first quarter.
"If we get information that there are laggards, those firms
can expect enhanced supervisory attention from the Prudential
Regulation Authority and the FCA," Schooling Latter told an
event held by Risk.net.
Banks have already begun ditching Libor in derivatives
contracts but loans have more catching up to do.
"We feel very confident ... that we are on track to meet
this milestone at the end of the first quarter," said Andreas
Giannopoulos of Barclays who is a member of a UK
industry working group on shifting away from Libor.
Some dollar Libor rates can be used in existing contracts
from the end of 2021 to June 2023, but not in new ones.
"You should be working very quickly right now to move away
from the use of dollar Libor," David Bowman, senior advisor at
the U.S. Federal Reserve's board of governors, said.
(Reporting by Huw Jones
Editing by David Goodman and Alexander Smith)