Jul 19 2012
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UAE Ctrl Bk Seeks Intl Bk to Replace Barclays on Eibor Panel -Source
Thursday, Jul 19, 2012
(This story was originally published Wednesday.)
--Eight local banks and four international banks currently sit on panel
--Central bank approved Barclays exit at meeting Tuesday
By Asa Fitch and Leila Hatoum
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 panel that sets the Emirates Interbank Offered Rate, or Eibor. The move comes 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 three months under internal central bank guidelines that stipulate a waiting period to allow time for a replacement to be found, the central bank said in a statement posted on the U.A.E. state news agency's website Wednesday. There has been no suggestion that the U.A.E. rate has been manipulated.
Barclays' request to withdraw was approved at the meeting on Tuesday, the central bank said.
"The agreement comes in light of justifications which Barclays has presented to the committee to withdraw from the group, including the circumstances relating to London and New York events," the statement said.
-By Asa Fitch and Leila Hatoum, Dow Jones Newswires, +971 4 446-1685, firstname.lastname@example.org; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
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