HL Deb 08 May 1990 vol 518 cc1350-1WA
Lord Williams of Elvel

asked Her Majesty's Government:

Whether the definition of LIBOR (including the maturity date) in Schedule 1 to Regulation 2(3) of the Fossil Fuel Levy Regulations 1990, namely

""LIBOR", in relation to any particular day means the rate per centum per annum which is the arithmetic mean (rounded if necessary to the nearest whole multiple of one sixteenth of one per centum, with any odd thirty-second being rounded upwards) of the offered quotations (expressed as percentages) for deposits in sterling for a three month period which appear on the Reuters display screen page entitled LIBP (or such other page as may replace that page from time to time in that system) at or about 11.00 a.m. London time on that day excluding, if there are more than three such quotations, the highest and lowest of them (or, if there are more than one highest or lowest quotation, excluding only one of them) or, if that page is not available, or if fewer than three quotations are available at that time on that page, the arithmetic mean (rounded if necessary to the nearest whole multiple of one sixteenth of one per centum, with any odd thirty-second being rounded upwards) of the respective rates notified to the Director by any three United Kingdom clearing banks selected by the Director as the rate at which each such bank is offered deposits for three months for a sterling amount of £25 million by prime banks in the London Interbank Market at or about 11.00 a.m. London time on that day", is correct, given that rates quoted by different United Kingdom clearing banks vary as between one bank and another and that the selection by the Director of three United Kingdom clearing banks at his sole discretion as reference banks may be a random factor.

Viscount Ullswater

The definition of LIBOR in the Fossil Fuel Levy Regulations takes the average of the rates quoted by a number of banks to derive a representative market rate on the day in question. The Director will only need to select three banks to provide rates if the Reuters screen is not available. He will clearly do so in the way he thinks most likely to produce a representative market rate.