UK to legislate reforms of Libor

LONDON Oct 17 (Reuters) - Britain will change the law to reform the Libor interest rate that was rigged by Barclays and other banks, the country's finance ministry said on Wednesday.

Barclays was fined a record 290 million pounds in June for manipulation of the London Interbank Offered Rate, a benchmark used as a basis for pricing products like home loans worth over $300 trillion.

Martin Wheatley, managing director of the Financial Services Authority, published recommendations last month for reforming the setting, governance and regulation of Libor.

The UK finance ministry said on Wednesday that it will insert some of the recommendations into a financial bill now in the final stages of approval in parliament.

"The government's changes to legislation will ensure that those that attempt to manipulate LIBOR face the full force of the law," UK financial services minister Greg Clark said in a statement.

"But this is just one part of the process, the banks and the British Bankers' Association will have to play their part to ensure that reform is effective and LIBOR's reputation is restored," Clark said.

The legislative changes will create a new criminal offence for misleading statements in relation to benchmarks such as libor.

The new Financial Conduct Authority (FCA) will be given powers to write rules on how banks make their submissions for compiling libor.

The BBA will be removed and replaced as administrator of Libor, Clark added.

Royal Bank of Scotland is expected to be the next lender to settle charges of attempting to manipulate Libor.