Shocks & Stares » Martin Wheatley http://blogs.hillandknowlton.com/shocksandstares H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 The future of Libor – 2 key points from a comms perspective http://blogs.hillandknowlton.com/shocksandstares/2012/08/the-future-of-libor-2-key-points-from-a-comms-perspective/ http://blogs.hillandknowlton.com/shocksandstares/2012/08/the-future-of-libor-2-key-points-from-a-comms-perspective/#comments Tue, 14 Aug 2012 09:31:05 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=706 On Friday I attended Martin Wheatley’s unveiling of the Government-commissioned review of Libor at Bloomberg’s offices. Wheatley, who will head the new Financial Conduct Authority, gave an hour long speech setting out the consultation. He’s set himself an ambitious task – the deadline for responses is only four weeks away and Wheatley will publish his final recommendations by the end of September.

The speech itself contained a mixture of detail and vision for the future of Libor or its replacement. From a Comms/PR point of view, there were two particularly interesting points:

1. Who Runs Libor or its replacement? At the moment, Libor is run by the British Bankers Association, the trade group and voice for the industry. Some people are concerned that the setting of such a key market metric is being done by what is effectively a pressure group for the industry. Martin Wheatley, it appears, is less concerned – when asked about this specific issue, he stressed that other similar bodies run indices and provide important data. While Wheatley did acknowledge that the BBA’s history may count against it, at present they appear to still be in the running for a role.

2. How much of an effect does Libor have on consumers? As Wheatley remarked, he found it amazing that Libor had become such a big story outside of the financial press, with tabloids, news channels and Twitter all focusing on the story intently. Perhaps he shouldn’t have been quite so surprised – the prevailing distrust of the financial services sector means that the next scandal to be exposed is always going to attract attention.

There’s another reason as well. As the scandal entered its second and subsequent days, the media ramped up mentions of Libor as a tool which “sets mortgage and interest rates” or something to that effect. In some instances this description for Libor became the norm, occasionally replacing the descriptor of “the rate at which banks lend to each other”.

So just how many mortgages does Libor impact exactly? Well, Wheatley confirmed this – 2%, or as the FT reported in June, around 250,000. In a country of 30m homes that’s still a large number, but it may be legitimate to ask whether the press were right or fair to describe Libor’s role as they did given this statistic.

With the short timeframe for the consultation, the media focus on Libor isn’t going to go away. How the media choose to describe Libor could go a significant way to determining Wheatley’s recommendations, and which of them the Government chooses to implement.

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