The Australian Financial Markets Association is to change the way it sets bank bill swap rates. Over the next few months it will move from having a panel of traders submitting observations each day to a process whereby it extracts rates directly from principal brokers and electronic markets.AFMA's announcement coincides with the news that two more panel members are withdrawing. HSBC Bank Australia and Citibank NA will withdraw from the panel at the end of this month.These withdrawals follow similar moves by JP Morgan and UBS. Over the past few months the BBSW panel has been reduced from 14 to 10.AFMA executive director David Lynch said the withdrawals were a result of global banks "curtailing risks in relation to financial benchmarks."Lynch said a panel of 10 would have worked effectively. He said some of the smaller Libor countries operate with panels of this size.However, the withdrawals were a catalyst for AFMA to look at opportunities to develop a more efficient process. Lynch said market participants supported the new process.He said: "An advantage of this enhancement is that it will eliminate the associated compliance and ancillary costs which otherwise exist for panelist banks."This change will not affect the basis of BBSW, as it deals with the operational process through which rates quoted on the market are compiled to generate BBSW."