Sharon Bowles, chair of the reform-setting European Parliamentary Economic and Monetary Affairs Committee, has said she opposes the use of repo market funding rates as a replacement for Libor. Her comments come as the UK government kicks off its month-long review into the benchmark.

Bowles, one of Europe's most influential policymakers, told Financial News: "We are looking at what we can use as a replacement for Libor. Both Gary Gensler [chairman of the US Commodity Futures Trading Commission] and Ben Bernanke [chairman of the US Federal Reserve] have mentioned the use of the repo market. However, I am not happy about the idea since I'm not happy about repo markets in general."