Don’t hide behind archaic loan market practices — fix Libor

One of the most senior European loans bankers, Julian van Kan, has suggested that to cope with the widely publicised shortcomings of Libor, the loan market should go back to a system used in the 1990s. But setting loan rates privately or on an ad hoc basis would cloud the atmosphere, rather than helping to clear it. Banks and borrowers should face up to the fact that loan margins should reflect the lenders’ funding costs.