Final report due on regulation of benchmarks

City A.M. Reporter
REGULATORS are expected to unveil final guidelines this week for improving transparency and oversight of benchmarks covering everything from interest rates to oil and gold.

But critics are warning that a blueprint from the International Organisation of Securities Commissions (Iosco) already risks failure if individual countries persist in pursuing their own regimes. Iosco has no power to enforce its recommendations and with Hong Kong and Singapore, which are already forging ahead with their own proposals.

Trust in financial benchmarks has suffered since revelations last year that traders had routinely manipulated the London interbank offered rate (Libor), used to help price $550 trillion in contracts worldwide. Regulators also are investigating benchmarks for the crude-oil and swaps markets.

Iosco’s final report will be used by the Financial Stability Board, headed by Mark Carney, to oversee reform of benchmarks in the interbank market. But the FSB will not report back until next year, when it may be too late to get individual countries to change reforms already introduced.