Wednesday, Jul 18, 2012

DUBAI (Zawya Dow Jones)--The central bank of the United Arab Emirates is looking for an international bank to replace Barclays PLC (BCS) on the 12-lender panel that sets benchmark interbank interest rates in the country, but may face difficulties in finding a suitable candidate, according to a person familiar with the matter.

The central bank called a meeting on Tuesday to discuss the issue, after Barclays sent a letter to the regulator asking to withdraw from the Emirates Interbank Offered Rate, or Eibor, panel amid a Libor rate-fixing scandal that has resulted in fines and other sanctions from regulators in the U.S. and Europe.

The regulator wants to preserve the balance of four international banks and eight local ones on the panel that sets the Eibor, the person, who declined to be identified, told Zawya Dow Jones. If no good international candidate comes forward, however, the central bank may turn to a local bank to fill Barclays' spot, the person added.

Barclays meanwhile is to stay on the panel for up to 90 days under internal central bank guidelines that stipulate a waiting period to allow time for a replacement to be found, according to a person at the country's top bank. There has been no suggestion that the U.A.E. rate has been manipulated.

-By Asa Fitch and Leila Hatoum, Dow Jones Newswires, +971 4 446-1685, asa.fitch@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

18-07-12 0925GMT