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04 November 2013

Reuters: EU lawmakers pledge speedy Libor reform, scope debated

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EU lawmakers pledged rapid approval of a draft EU law to regulate market benchmarks such as Libor, although they sparred over how comprehensive the new regime should be.

The committee's British Liberal chairwoman, Sharon Bowles said the scope of rules was too wide to be practical and should be curbed to focus on top interest rate and commodity benchmarks, such as those using to price financial products sold on the high street. "We can start slowly and then accelerate", Bowles told the committee.

British Conservative lawmaker Syed Kamall said the Libor scandal should not be used as an excuse for more European regulation than is necessary. "If we are going to do this as quickly as possible then we need to focus on a few benchmarks", Kamall added.

But Emilie Turunen, a Danish member of the European Parliament's economic affairs committee, whose Socialists & Democrats party is the second biggest bloc in parliament, said scope should be broad. "I think the ongoing cases of manipulation in many different areas shows we do need as wide a scope as possible when it comes to different products in different markets", Turunen said.

Bowles said the aim was for the committee to vote on January 30 with a vote in full parliament in March. Parliament and lawmakers will have to agree on a common text to become law.

Full article

ECON-Bowles first draft report

Rabobank RABN.UL traders and bankers involved in an interest rate rigging scandal should be prosecuted, said Dutch Finance Minister Jeroen Dijsselbloem"You should not be allowed to get away with this type of fraud", Dijsselbloem said in an interview with broadcaster RTL on Tuesday, adding that prosecutors should "take a hard look" at prosecuting those responsible. "A lot of people don't understand, myself included, that it's possible to get away with this type of fraud and that's the impression this gives."

Dijsselbloem plans to write to parliament about the Libor scandal to explain how it was possible the rate-fixing was not exposed earlier, despite early warnings at both the Dutch central bank (DNB) and Rabobank. "The question is obviously why didn't the bank, Rabobank, or the DNB act", he said.

Further reporting © Reuters, 6.11.13

© Reuters

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