British authorities are set to announce significant changes to the interest rate at the heart of a recent manipulation scandal as they aim to improve the accuracy and reliability of the benchmark.

On Friday, Martin Wheatley, the managing director of Britain’s Financial Services Authority, will outline plans to increase oversight of the rate-setting process, which underpins more than $350 trillion of financial products like mortgages and student loans.

As part of that effort, regulators are stripping the British banking group that currently oversees the interest rate — the London interbank offered rate, or Libor — of its power. The British government, in turn, will take a more hands-on role, including making rate manipulation a criminal offense.

British Authorities to Announce Changes in Libor Oversight, 9/27/12

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