Bloomberg News

EU Lawmakers Target Libor Fixing With Market-Abuse Amendments

July 18, 2012

Manipulating interbank lending rates like Libor may be made a criminal offense across the European Union under draft proposals published by EU lawmakers.

The European Parliament proposed that anyone who gave “false or misleading information on the value of interest rates, currencies or indexes” would be punished for market manipulation, according to a document published on its website.

Members of the parliament’s economic and monetary affairs committee intend to add the measure to a draft law against market abuse published last year by European Union Financial Services Commissioner Michel Barnier. The move would ensure regulators can seek jail sentences and other criminal sanctions for people found guilty of rigging interbank lending rates.

Barclays Plc (BARC), the U.K.’s second-largest bank by assets, was fined 290 million pounds ($452 million) on June 27 for rigging the London interbank offered rate, a global benchmark, for profit. Chairman Marcus Agius, Chief Executive Officer Robert Diamond and Chief Operating Officer Jerry Del Missier subsequently resigned.

The record fine provoked renewed calls for tougher oversight of the financial system and pushed regulatory probes into interbank lending rates to the top of the political agenda.

Barnier backs the plans to amend his proposals in light of the scandal, he said July 8. Draft laws proposed by the commission must be approved by the parliament and by national governments before they can take effect.

To contact the reporters on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net;

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net;


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