"I am so pleased to have had such a high-level panel attend the hearing who all recognise the seriousness of the Libor scandal and its impact on the real economy and ordinary people. I will be continuing my discussions with the Commission and market participants to get a new transparent and resilient benchmark regime for interbank lending, based on real time transaction data", said Arlene McCarthy (S&D, UK), the lead MEP on draft legislation on criminal sanctions against market manipulation.
Participants agreed that benchmarks such as Libor should be anchored in observable transactions and should be transparent. They also said that benchmarks should continue to be set by private businesses such as banks, with data-based objectivity, but since integrity and trust are public goods, they should remain under public control and supervision.
MEPs also voiced concerns about small firms' loss of trust in banks, conflicts of interest between banks and their clients, how to estimate the losses imposed by Libor manipulation on market players, and how best to punish the offenders.
Press release
Speaking at the hearing, Commissioner Barnier talked about tackling the culture of manipulation, what the systemic failures were, how widespread the problem is and what action is being taken. "The benchmark indices are used globally; it is essential to coordinate our work with our international partners. The Commission is working closely with the ECB and other central banks, the FSB and IOSCO to consider as quickly as possible alternatives to the current system that best meet the needs of the economy."
Full speech (French only)
EuroparlTV interviews MEPs Arlene McCarthy and Olle Schmidt
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