(Adds ARRC comments)

WASHINGTON/LONDON/NEW YORK, Nov 30 (Reuters) - The United States will get more time than the rest of the world to ditch Libor after American banks agreed to help compile the tarnished interest rate benchmark until mid-2023, regulators announced on Monday.

ICE Benchmark Administration (IBA), which takes quotes from a panel of banks to compile different Libor "tenors" across a range of currencies, said it would consult on ceasing publication of one-week and two-month U.S. dollar Libor by the end of 2021.

All remaining Libor tenors, which are more heavily used, will cease after the end of June 2023, IBA said in a statement.

Extending the publication of some dollar Libor tenors to June 2023 would allow most "legacy" or outstanding contracts to mature before Libor experiences disruptions, U.S. regulatory agencies said in a statement on Monday.

The regulators said the new 2023 deadline only applies to existing Libor contracts and that markets should stop using Libor "as soon as practicable". No new Libor contracts will be allowed after 2021.

"Given consumer protection, litigation, and reputation risks, the agencies believe entering into new contracts that use USD Libor as a reference rate after December 31, 2021, would create safety and soundness risks and will examine bank practices accordingly," the U.S. regulators said.

The Alternative Reference Rates Committee (ARRC), an industry group convened by the Federal Reserve, in a published statement said the extension of some contracts would help accelerate the transition from Libor to the Fed's overnight rate the Secured Overnight Financing Rate (SOFR).

"This by no means should slow down work, it should actually give people the clarity they need to navigate this transition with more information than they had before today," said Tom Wipf, chairman of ARRC and vice chairman of institutional securities at Morgan Stanley, in an interview with Reuters.

"This really lays out what that end game looks like and how we get there."

While the coronavirus pandemic has slowed the transition to SOFR, the new benchmark has found some traction. CME Group reported that in October, average daily trading volume of SOFR futures increased by 28% from a year prior.

Monday's announcement bolstered shorter-dated Treasuries, tamping down yields at the front end of the curve. The three-year yield was last down roughly a basis point to 0.189%.

Global regulators set a deadline of the end of 2021 for scrapping Libor after banks were fined billions of dollars for trying to rig the interest rate.

Libor is used to price financial contracts worth around $400 trillion dollars, making it a huge task for the market to switch to an alternative rate.

Such an 18-month extension was not proposed by IBA for the rate's other denominations - euro, sterling, Swiss franc and Japanese yen, partly a reflection of the heavier usage of the greenback version in financial contracts, from home loans to credit cards.

Dollar Libor underpins contracts worth around $200 trillion, about half of all Libor contracts globally.

Users of Libor in other currencies have been told by their regulators to proactively shift the pricing of legacy contracts to alternative rates set by central banks before the end of 2021 or risk ending up in a legal vacuum.

(Reporting by Kate Duguid in New York, Editing by Pravin Char, Bernadette Baum and Sam Holmes)