"Abnormal" Euribor quotes down sharply - watchdog
LONDON, Sept 20
LONDON, Sept 20 (Reuters) - The number of "abnormal" quotes for setting the Euribor interest rate benchmark is down sharply after fines for two banks who rigged it led to tighter supervisory scrutiny, an EU regulator said on Friday.
Euribor and its UK counterpart, the London Interbank Offered Rate or Libor, are compiled from quotes submitted by panels of banks.
Banks were accused of "low balling" quotes at the height of the financial crisis to give the impression they were stable and still able to borrow at cheap rates from their peers.
The European Securities and Markets Authority (ESMA) said the incidence of "obviously erroneous submissions" seems to have declined as banks follow guidelines from ESMA and the European Banking Authority to make submitting quotes more rigorous.
The guidelines were brought in after Barclays and UBS were fined for manipulating Euribor and Libor. RBS was fined for manipulating Libor.
"Patently erroneous submissions became rare in recent months," ESMA said in a study published on Friday. Abnormal deviations for Euribor did not occur at all between September 2012 and May 2013.
The continuity of key benchmarks in the EU remains a major concern as banks pull out of panels. The number of banks on one Euribor panel has fallen from 42 to 32, ESMA said.
Global efforts are underway to base a reformed Libor and Euribor on recorded market transactions.
A draft EU law published on Wednesday would give regulators powers to force banks to participate on panels.