EU: New bill begins legislative LIBOR repercussions

A new legal plan following the widespread LIBOR scandal will be outlined Wednesday by European regulators, a proposal that abandons earlier plans to place benchmark regulation in the hands of just one regulator based in Paris, say reports.

According to Reuters, which saw a draft of the legal framework, reinforcing the new rules will largely land in the hands of member states; the idea contradicts earlier suggestions that benchmarks will be regulated only by the European Securities and Markets Authority.

The new legal framework will be introduced by Michel Barnier, the EU’s regulatory chief, as the EU’s legal response to the LIBOR scandal. The scandal unveiled the widespread manipulation of the London Interbank Offered Rate, which sets interest rates for home loans, credit cards and more.

According to Reuters, the proposal will additionally regulate benchmarks used to set prices of physical commodities.

In response, some industry lobbyists agree that the Commission has “watered down” proposed rules, but would still like regulation scaled even further back.

Full Content: Reuters

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