European Commission moves to make Libor fixing illegal
Viviane Reding, justice commissioner for the European Union, said the amendments would prohibit the manipulation of benchmarks, including Libor and Euribor, and make such manipulation a criminal offence.
She said: “EU action is needed to put an end to criminal activity in the banking sector and criminal law can serve as a strong deterrent. This is why we are proposing EU-wide rules to tackle this type of market abuse and close any regulatory loopholes.
“A swift agreement on these proposals will help restore much needed confidence of the public and investors in this crucial sector of the economy.”
Internal market and services commissioner Michel Barnier said: “The international investigations underway into the manipulation of Libor have revealed yet another example of scandalous behaviour by the banks.
“I wanted to make sure that our legislative proposals on market abuse fully prohibit such outrages. That is why I have discussed this with the European Parliament and acted quickly to amend our proposals, to ensure that manipulation of benchmarks is clearly illegal and is subject to criminal sanctions in all countries.”
The EC is also investigating possible price-fixing cartels linked to manipulation by some banks of interest rate benchmarks.
So far only Barclays has been fined for fixing Libor rates but other banks are under investigation by the FSA.