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EU to regulate financial benchmarks like LIBOR

September 19, 2013
The Associated Press

BRUSSELS - The European Union wants to regulate financial benchmarks that are used in transactions worth trillions of dollars globally, an effort to prevent market manipulations such as the one involving LIBOR, an interest rate banks use to borrow from each other.

The European Commission, the executive arm of the 28-nation European Union, on Wednesday unveiled draft legislation that tightens the financial instruments' oversight, increases transparency and introduces stiff fines for manipulations.

Under the proposal, national regulators and a coordinating European body are granted new powers to investigate possible rigging or conflicts of interests and can issue fines of up to 10 percent of a firm's revenue.

The London interbank offered rate, or LIBOR, is an average rate that measures how much banks expect to pay each other for loans.

 
 

 

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