A dual-track system, including survey-based lending rates along with transaction-linked indices, is likely to replace scandal-hit London interbank lending rate Libor as soon as next year, the Financial Times reported on its website on Sunday.

The new system would provide continuity for holders of $350 trillion in existing contracts that reference Libor while also paving the way for a new benchmark tied more closely to objective data, Martin Wheatley, chief executive of Britain's Financial Conduct Authority who is leading efforts to reform the benchmark, told the FT.

The proposal, however, could conflict with US regulators, who want a switch from survey-based lending rates to transaction-linked indices to calculate the interest payable on corporate debt and underpin the global market in financial derivatives.

Gary Gensler, chairman of the US Commodity Futures Trading Commission, told the FT that the existing system was "unsustainable" in the long run because banks were not doing enough unsecured lending to make accurate estimates.

The top US regulator told a conference in London last month alternatives based on market transactions should be used and a fixed date set for scrapping the existing Libor and Euribor benchmarks that are currently based on quotes from banks.

More than a dozen banks are under investigation by authorities in Europe, Japan and the United States over suspected Libor rate rigging between 2007 and 2010 and officials, including incoming Bank of England Governor Mark Carney, are weighing up reforms to safeguard its integrity. – Reuters