EUROPEAN commissioner Michel Barnier called for jail terms for interest rate manipulators yesterday, while a top US regulator called for the benchmark interest rate to be based on real transactions, not estimates.
Barnier told a European parliament hearing that “an EUwide ban on manipulation” would “get rid of this ‘everything is allowed’ attitude.”
“Any manipulation of the rates has a very bad impact on public confidence and undermines all we are trying to do to improve honest and transparency in the banking industry.”
Meanwhile Gary Gensler from the US Commodity Future Trading Commission told MEPs only a major overhaul of the Libor setup would restore faith in the system.
That needs to address the lack of actual loans used to formulate Libor, the lack of regulatory oversight and the conflict of interest created when banks are affected by their own Libor submissions, he said.