EU: Lawmakers back tighter benchmark standards

The European Parliament on Tuesday backed plans to improve the supervision of financial benchmarks in the wake of the Libor interest rate-rigging scandal.

Lawmakers hope the measures can be finalized by the end of the year.

Benchmarks – which include major indices such as Libor and Euribor, but also those used to set cocoa or oil prices – are a reference for financial instruments and contracts valued at more than 1,000 trillion euros (1,150 trillion dollars), according to some estimates.

Suspicions about rate-rigging arose during the 2008 financial crisis. Since then, financial institutions including Britain‘s Barclays bank, Swiss banking giant UBS and Germany‘s Deutsche Bank have been slapped with hefty fines over the practice.

“Manipulation of benchmarks affects us all, whether it comes to the interest we pay on our mortgage, the value of our pension plans or the price of petrol,” said EU lawmaker Cora van Nieuwenhuizen, who shepherded the bill through parliament.

The proposals must now be negotiated with EU member states.

Full content: Bloomberg

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