The U.K. government today set out its timetable for revamping the Libor rate-setting system, saying that urgent reform is needed.

The review will be conducted by Martin Wheatley, a top official at U.K. regulator the Financial Services Authority, and will look at how Libor, or the London interbank lending rate, which is a benchmark interest rate for around $800 trillion of financial contracts around the world and is commonly used for Sterling and U.S. dollar denominated instruments, is calculated and regulated.

Barclays was hit with a record fine of $451 million in the U.K. and U.S. on June 27 after Britain’s second biggest bank admitted to manipulating Libor from 2005-2009 to the benefit of its derivative positions, as well as by a desire to make the bank look stronger during the financial crisis.

It is widely expected that other banks will face fines for manipulation of Libor, with possible criminal sanctions against individuals involved.

“The findings of the FSA—in conjunction with the U.S. Commodity Futures Trading Commission and the Department of Justice—relating to misconduct in respect of Libor and Euribor [which is used for euro denominated agreements] submissions are extremely serious in nature,” said Wheatley in a statement published by the U.K. Treasury.

“This benchmark rate is used globally for trillions of dollars worth of financial contracts. Therefore, it is clear that urgent reform of the Libor compilation process is required. Such reform may include amendments to the technical definitions used for Libor, the associated governance framework and the role of official regulation. The review will also consider whether similar measures are required for other existing benchmarks.” 

The review, which only has two weeks to publish its findings, will not consider any issues relating to the actions or alleged actions of specific financial institutions in attempting to manipulate Libor or other benchmark rates. These issues will continue to be investigated by the FSA and other regulators around the world.

Once the review is published, a four-week public consultation will follow with final conclusions by the end of September. U.K. chancellor George Osborne will then consider how Wheatley’s recommendations can be incorporated into a financial services draft law already making its way through parliament.

Meanwhile, CME Group, the biggest U.S. futures exchange operator, which uses Libor to underly some of its main derivatives markets, last week came out in support of the much-maligned benchmark rate.

“This contract is too important for us not to continually adjust it or pay attention to it,” said Phupinder Gill, CME’s chief executive, to analysts at a conference call discussing its second quarter results. “It’s one of the flagship contracts that CME has.

“Where Libor is concerned, we expect that it is going to remain the predominant short-term reference point contract. There are issues and we are in support of anything that would fix those issues.”

While Terrence Duffy, CME Group’s executive chairman and president, took a swipe at some who believe that the rate is too tarnished to use going forward.

“I know Libor has come under a lot of scrutiny,” said Duffy. “[But] I do believe it will remain a pre-eminent benchmark. And just to add a little bit of credibility to this, some of the people that are crying the loudest are still using it, and that would be the U.S. federal government. The [Federal Reserve] still uses Libor as it makes its loans today. So they use that as a reference point when they make their loans. So I do believe that this will still continue to be the benchmark going forward.”

Libor is a notional rate set by a 16-bank panel based in London. Members of the panel of international banks are all asked how much it would cost to borrow from one and other and the rate is then calculated and published daily by market data vendor Thomson Reuters on behalf of the British Bankers’ Association, a trade association for the U.K. banking and financial services sector, covering a variety of currencies and time durations.

Earlier this month, NYSE Liffe U.S., the futures exchange operated by NYSE Euronext, announced that it had successfully completed the first full week of trading in a new index that could, over time, become a replacement for Libor.

The DTCC GCF Repo index, which lists the daily interest rates for the general collateral finance repurchase agreements market, saw 19,959 contracts traded, valued at $100 billion, with 10,980 lots of open interest by the end of the first week of trading on July 20. The GCF Repo uses actual prices from a large volume of real-life trades among banks, whereas Libor is based on banks’ own estimates of their future borrowing costs.