By Richard Leong

NEW YORK (Reuters) - A top bond broking firm plans to launch an alternative U.S. rate benchmark to the London interbank offered rate, whose reliability has been questioned during the current global credit crisis.

ICAP (IAP.L: Quote, Profile, Research) said on Thursday its survey of borrowing rates between U.S. banks, called the New York Funding Rate, or NYFR, is intended to address the shortcomings of Libor cited by traders and analysts.

NYFR will reflect banks' estimate on the market rate to obtain unsecured funding from each other, rather than the rates at which banks say they are borrowing, which Libor measures.

"By changing the parameters, we will get a different perspective," said Lou Crandall, chief economist at Wrightson ICAP. "Whether it NYFR.L is accurate, the players will know."

A reliable Libor alternative has generated some market buzz, but it is too early to use NYFR to trade and to underwrite loans.

"We'll follow it, but it's premature to think about switching to it on Day One," said Colin Lundgren, head of institutional fixed-income at RiverSource Investments in Minneapolis. "It is reasonable to say it would take a year or two for it to catch on."

DEVELOPING AN ALTERNATIVE

ICAP already publishes Eurodollar rates, which are reflected in dollar Libor, on news and data terminals from Bloomberg, Thomson Reuters (TRI.TO: Quote, Profile, Research) (TRIL.L: Quote, Profile, Research) and other information vendors. Those rates are cited by the Federal Reserve in its daily survey of U.S. interest rates.