The BOE is poised to take over a key UK rates benchmark
The bank says reform of Sonia vital, given its role as a critical benchmark in sterling markets
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London
THE Bank of England said on Wednesday that it will take control this month of an interbank lending rate that is an important gauge of what investors are predicting about the central bank's next moves on monetary policy. The Sterling Overnight Index Average (Sonia) has also been considered as an alternative for some contracts to the London Interbank Offered Rate (Libor), a global benchmark for around US$450 trillion of contracts that has been tainted by a market-rigging scandal.
The BOE announced last year that it planned to take overall responsibility for Sonia from the Wholesale Markets Brokers' Association. As of April 25, the industry group will continue to calculate and publish Sonia but on behalf of the BOE.
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