Britain acted on Tuesday to switch management of the prized Libor exchange rate and restore confidence in the benchmark after revelations of market rigging besmirched the reputation of the City of London financial centre.
The British Treasury said that the Libor rate, which plays a pivotal role in many areas of international finance, would be supervised by stock exchange operator NYSE Euronext.
Supervision would still be based in London, but the switch was intended to restore the benchmark's "credibility", the Treasury said Tuesday.
The decision came after the British Bankers' Association (BBA) was forced to give up its role following the Libor scandal.
The announcement followed a tendering process launched in February to find a new administrator for the London Interbank Offered Rate (Libor) via an independent committee.
Committee chair Baroness Hogg said: "This change will play a vital role in restoring the international credibility of Libor."
Britain's banking sector was last year rocked by revelations that Barclays tried to manipulate the rate, which is used as a benchmark for global financial contracts worth about $300 trillion.
"BBA was criticised for its lack of supervision over the Libor scandal so this win should go some way in restoring lost confidence in the rates market," said Ishaq Siddiqi, market strategist at ETX Capital trading group.
Libor is calculated daily, using estimates from banks of their own interbank rates. However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.
In the wake of the scandal, Britain's government launched the Wheatley Review, which called in September for the BBA to lose its key role.
"The appointment of a proposed new administrator is a major step forward in the reform of Libor," the Treasury said on Tuesday.
Finbarr Hutcheson, chief executive officer of NYSE Liffe, welcomed the decision.
"We look forward to working with BBA Libor Ltd in completing the smooth transition to NYSE Euronext Rate Administration Limited, and continuing the process of restoring credibility, trust and integrity in Libor as a key global benchmark."
The Libor scandal erupted when Barclays was fined £290 million ($470 million, 363 million euros) by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.
Royal Bank of Scotland and Swiss lender UBS have since also received heavy fines over alleged rigging of Libor. Euribor is the eurozone equivalent.
"The government is committed to developing a safer and strong banking sector," Britain's Financial Secretary to the Treasury, Greg Clark, said on Tuesday.
"We want a financial sector that serves the interests of business and helps to drive economic growth.
"That is why since the Libor scandal last summer we have worked hard to reform this major international benchmark."
The switchover meanwhile comes as NYSE Euronext, which operates the New York stock exchange and several bourses in Europe, prepares to be taken over by InterContinental Exchange.
ICE, which specialises in commodity and financial derivatives for investment, offered $8.2 billion for NYSE Euronext in December last year after an earlier bid failed.