Singapore asks banks to look into interbank rate setting process

SINGAPORE, July 25 (Xinhua) -- The Monetary Authority of Singapore has directed banks to look into their processes concerning the setting of the benchmark interbank interest rates, Managing Director Ravi Menon said on Wednesday.

The central bank has asked for an independent review, too, following investigations launched in the United States and Britain into the London Interbank Offered Rate (LIBOR) manipulation scandal.

The methodology of determining the benchmark interbank rates in other jurisdictions are mostly modeled after the LIBOR.

The review in Singapore will focus on two prominent rates in Singapore, the Singapore Interbank Offered Rate (SIBOR) and the Swap Offer Rate (SOR).

"The major central banks and banking associations are looking closely at this to see if the methodology is sound, to see if the control mechanism put in place for executing it are sound," Menon said.

The Monetary Authority said the Singapore Foreign Exchange Market Committee is also working with the Association of Banks in Singapore to look into a number of areas, like if there were sufficient number of banks involved in the process of setting the benchmark rates. Enditem

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