Libor continues to take hits as regulators, others promote new benchmarks.

Ever since the eruption of the Libor scandal several weeks ago, there has been no shortage of talking heads and others discussing what should be used instead of the now-tainted index. But the regulator level of importance has bumped up a bit lately, indicating that the index is in for a fight to stay relevant. Could this mean the beginning of the end of the benchmark?

First there was Federal Reserve Chairman Ben Bernanke who in mid-July suggested that a number of market rates could replace Libor as a benchmark for lending rates, including a “switch to a market-based indicator.” He said other possibilities include repo rates. And now Commodity Futures Trading Commission Chairman Gary Gensler has weighed in to further pressure Libor’s existence.

In a New York Times opinion piece, Mr. Gensler suggested Libor could be replaced by any number of indices, including the overnight index swaps rate, which is tied to the rate at which banks lend to one another overnight, a benchmark rate “based on actual short-term secured financings  between banks and other financial institutions.”

Meanwhile, Mr. Bernanke’s repo rate suggestion has taken hold with many influential stakeholders in the market, including the Securities Industry and Financial Markets Association (SIFMA), which last week came out in support of it. On August 1, after the US Treasury announced plans to issue floating rate notes (FRN), the US Treasury Borrowing Advisory Committee, a SIFMA committee that advises the US Treasury, said it is wanted to reference the new FRNs to the Global Collateral Finance (GCF) Repo Index, particularly given the recent launch of the NYSE Liffe’s listed futures on the index. The GCF Repo market is a $300 billion in size, according to the NYSE. The GCF Repo Index is compiled by the Depository Trust and Clearing Corporation (DTCC) and is the weighted average of interest rates paid in general collateral finance repos by banks. It’s a benchmark based on actual calculations rather than reported estimates: all GCF trades are based on real transactions, centrally cleared and collateralized by US treasuries, agencies and mortgage backed securities.

This is something Mr. Gensler alludes to in his commentary. “Markets work best when benchmark rates are based on observable transactions. The public is shortchanged if Libor, the emperor of rates, is not clothed in such transactions,” he wrote.

Other Libor replacement offerings include the Euro interbank offered rate, or Euribor, the level at which European banks could borrow for different periods in euros; overnight index swaps (OIS), which track market expectations for central bank rates; and the eurodollar rate, which is the rate for dollar-denominated funds deposited at banks outside the US. There are also benchmark rates based on actual short-term secured financings (loans in which collateral is pledged) between banks and other financial institutions.

Should treasurers care? For now they have broader concerns, like coming regulations and other compliance issues, counterparty risks, as well as their every-day jobs of managing the company’s cash. “People like me haven’t seen anything yet [in the scandal] that’ll make me start thinking about it or worrying about it,” said a treasurer, also noted he used the commercial paper market, which isn’t tied to Libor. “If it’s anything, the cost of business will probably go up as banks continue to get beat up and be less inclined to lend.”