The city is waiting with baited breath for Martin Wheatley's Libor reform report after the British Bankers Association reportedly voted to relinquish its role as regulator.

The London Interbank Offered Rate, the key rate at which banks agree to lend to each other, is used as a benchmark to indicates whether lending conditions are good or bad.

The BBA has been overseeing it since the 1980s, but since the manipulation scandal (which so far as hit Barclays the worst, but another 12 banks are under investigation) the rate's credibility has been hit.

And now the BBA has offered to give up its responsibility to oversee Libor.

The development isn't entirely unexpected - the BBA was, at times, a reluctant gatekeeper of the process.

On 5 April 2008, Angela Knight, chief executive of the BBA, told a meeting of senior UK bankers and representatives of the Bank of England that "longer term, [she] thought it would be necessary to explore whether a trade association was best placed to continue to provide what represented a key piece of market infrastructure ".

Martin Wheatley, managing director of the Financial Services Authority) and chief executive-designate of the Financial Conduct Authority, will publish his review of Libor on Friday - and it is widely predicted to include a new system of compiling the rate and of supervising the banks which contribute to it.

Sky News reported on 25 September it believed the report would recommend for the rate-setting process to have formal regulatory oversight, potentially by a body such as the Financial Stability Board.

And Thompson Reuters predicted the report would include a recommendation to use actual market trades, rather than quotes to compile Libor.

Whether the FSB would want to be associated with the rate-setting responsibility is not known; the whole financial services industry has been tarnished by the scandal and in previous years the city's regulator, the FSA, has shown little interest in running the regulation previously.

Another possible option could be for the Bank of England to adopt a "watching brief"; while not ultimately responsible, it would watch from the sidelines and flag up any potential future problems to the attention of all interested parties.

Under this situation, a formal regulator is still likely to be needed, but at the time of going to press there was no real sense of who or what that might be.