Benjamin Fox | EUobserver
Bankers caught fixing the inter-bank lending rate Libor could in future face criminal charges after the European Commission announced plans on Wednesday (25 July) to widen the scope of the ongoing legislation on Market Abuse to include rate fixing.
Unveiling the proposals, which have been added to the Market Abuse legislation aimed at combating insider dealing and market manipulation, Justice Commissioner Viviane Reding accused those involved as acting as though they were “more banksters than bankers. Public confidence in banks have “taken a nosedive with the latest scandal,” she said.
Among the changes to the legislative package, which was tabled by the EU executive last October and is currently being debated in the European Parliament, are amendments to include the manipulation of interest rates and other financial sector benchmarks.
Internal market commissioner Michel Barnier told reporters he would come forward with EU regulation specifically looking at the calculation of interest rates by the end of 2012.
The move follows public outcry about the Libor scandal which has engulfed Britain and the US in recent weeks. Addressing concerns that Eurlibor, the inter-bank rate for European banks, had been affected, Commissioner Barnier admitted that an investigation into possible manipulation was ongoing and had started in March 2011.
Libor, the inter-bank interest rate, determines the price of an estimated $800 trillion worth of financial instruments.