Martin Wheatley, managing director of the Financial Services Authority, has delivered his review on the LIBOR mechanism.
Mr Wheatley was tasked with carrying out a review of LIBOR after Barclays was fined for Libor-manipulation earlier this year.
In the final report of the Wheatley Review, Mr Wheatley proposed that the regulation of LIBOR be given to the FSA and for the regulator to be able to prosecute for Libor-manipulation. All employees able to set LIBOR should be an FSA approved person.
When making LIBOR submissions, he said transaction data should explicitly support these submissions.
Mr Wheatley said: "I am confident that the substantial package of reforms that I recommend in this final report provides a credible blueprint for the restoration of trust in LIBOR.
"I expect those with a direct interest in LIBOR - particularly those in the markets who contribute or use the benchmark - to show the same degree of commitment to getting this right."
Which? executive director Richard Lloyd said: "The action announced today to help prevent another LIBOR rate-rigging scandal, including independent governance and regulation of LIBOR, is a vital step towards restoring the shattered consumer confidence in banking.
"We now want to see the Government take forward these recommendations as soon as possible. There must be no delay. Action must be taken to fix our broken banking system and bring a return back to banks for customers, not bankers."