The British Bankers Association (BBA) has agreed to step back from its supervisory role in setting the London interbank borrowing rate (Libor), following the recent Libor rate-rigging scandal caused due to lack of transparency and accountability for rate fixation.

The decision to give up the oversight comes ahead of the proposed changes, which are due to be revealed by Martin Wheatley, managing director of the Financial Services Authority (FSA) this week.

In a statement issued by the trade body, BBA said, "If Mr Wheatley’s recommendations include a change of responsibility for Libor, the BBA will support that."

The Libor rate is widely used in the US, the UK and other nations to impact large volumes of swaps and futures contracts, commercial and personal consumer loans, home mortgages and other transactions.

BBA took control of Libor in 1986 and has the sole responsibility for all aspects of the functioning and development of Libor, the design of the benchmark, to determine the rate, and scrutiny of all rates submitted.

The trade body is also responsible for a suite of 150 rates in different currencies and maturities, which forms the very core for pricing contracts of nearly $350 trillion across the globe, ranging from home loans to credit cards.