LONDON, Sept 11 A draft European Union law to
regulate market benchmarks like Libor has ditched an earlier
plan to centralise supervision in a European agency, an EU
EU financial services chief Michel Barnier is due to publish
the draft law on Sept. 18 as part of the bloc's response to
three banks so far being fined for the rigging of Libor or the
London Interbank Offered Rate.
In an earlier draft leaked in June, so-called critical
benchmarks like Libor which are widely used across the
28-country bloc would have been supervised by the European
Securities and Markets Authority or ESMA in Paris, to the
annoyance of Britain.
The latest draft backtracks on that, saying "for critical
benchmarks colleges of supervisors should be formed to enhance
the exchange of information and ensure uniform authorisation and
This refers to supervisors from countries where a benchmark
is widely used meeting up to take joint decisions on authorising
and supervision of its compilation and use.