U.S. regulator Gary Gensler told CNBC on Tuesday that U.S. and U.K. regulators needed to implement an alternative to the scandal-plagued London Interbank Offered Rate (LIBOR) soon.
"[These rates] are incredibly important. Over $300 trillion of derivatives and $10 trillion in loans are based on these rates and we need to ensure they have market integrity and that they're based on fact, not fiction," Gensler told CNBC on Monday.
The chairman of the Commodity Futures Trading Commission (CTFC) added that there was cooperation between the U.S. and U.K. over strengthening the governance of interbank lending rates.
"There's been such a structural change that the interbank unsecured market essentially doesn't exist, that international lenders are now talking about alternatives and identifying alternatives and then finding out how to smoothly transition to those alternatives," he said.
(Read More: Libor Rates: A Reader's Guide )
"Market participants need to come together and identify rates that are based on observable transactions," he added.
Gensler has spearheaded an international rate-rigging investigation that has seen regulators fine three banks more than $2.6 billion. The U.K. financial watchdog said it would fine three more banks before the end of 2013 for manipulation of libor.
"We've been working very closely over the years with the Financial Services Authority (now the Financial Conduct Authority) on enforcement matters - on theBarclays (London Stock Exchange: BARC-GB), UBS (Swiss Exchange: UBSN-CH) and RBS (London Stock Exchange: RBS-GB) matter, where there was pervasive rigging of these rates. Why do the U.S. and U.K. authorities work together? Because this is a global market," he added.
Gensler denied that the U.S. regulator was trying to pull rank on U.K. authorities, saying there was trans-Atlantic cooperation on the issue.
"As a head of the U.S. market regulator, we seek to rout out fraud and manipulation, and these were pervasively and readily rigged, we need to find alternatives," he said. "We need to try to move on."
-By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt
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