Michel Barnier, the 27-nation EU’s financial services chief, said today that he would examine whether the manipulation of the London interbank offered rate had exposed “gaps” in the bloc’s laws. At the same time, legislators in the European Parliament are seeking to bolster plans unveiled last year to toughen sanctions against market abuse.
The resignations at Barclays came after the bank was fined a record 290 million pounds (euro 265 million) by regulators in the U.S. and U.K. for attempting to rig Libor. The bank admitted that it submitted false Libor information to benefit derivatives trades and bolster its own positions.
The Barclays fine provoked renewed calls for tougher oversight of the financial system and pushed regulatory probes of interbank lending rates to the top of the political agenda. De Rynck said Barnier is “following developments” with the commission’s antitrust department, which has a related probe into Libor and Euribor rates.
Arlene McCarthy, the lawmaker leading work in the EU parliament on the draft law on market abuse, said she and Barnier discussed how the bloc’s rules should be extended to ensure that manipulation of interbank lending rates is treated as a criminal offense.
The EU needs to “give regulators the tools they were asking for to be tougher” on market abuse, she said.
EU Prepares Tougher Bank Regulation in Response to Barclays LiborScandal - Bloomberg
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