The scandal that banks have manipulated submissions for the London interbank offered rate has prompted the UK financial watchdog to review the inner workings of Libor. Martin Wheatley, managing director at the Financial Services Authority, who is leading the review today outlined his thoughts on the current Libor system and suggested options on how best to reform it.

While he did not rule out scrapping Libor altogether and finding an alternative, he kept open the possibility of improving Libor, which we have outlined below.