* Battle looms over scope of new benchmark rules
By Huw Jones
LONDON Nov 4 European Union lawmakers have
pledged rapid approval of a draft EU law to regulate market
benchmarks such as Libor, though they sparred over how
comprehensive the new regime should be.
Big fines for Barclays and other banks over the
past 18 months for rigging interest rate benchmarks such as the
London Interbank Offered Rate or Libor, prompted the European
Union to propose the rules to supervise such indexes for the
The draft law proposes that an administrator is appointed to
oversee how each major benchmark is compiled, ensuring there is
a record of who contributed to it.
Since then regulators have begun studying the foreign
currency markets for possible manipulation.
"We have seen the scandals from last year with Libor and
Euribor and now we have cases of suspected fraud in forex and
commodities," Emilie Turunen, a Danish member of the European
Parliament's economic affairs committee said.
"There is a legislatory gap we need to fill," Turunen told
the committee, meeting in Brussels on Monday.
The parliament has joint say on the law with EU states but
is running out of legislative time ahead of elections in May
with other major financial regulation to approve as well.
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
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 Turunen, whose Socialists & Democrats party is the
second biggest bloc in parliament, said scope should be broad.
"I think the on-going 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,"
Bowles said the aim was for the committee to vote on Jan. 30
with a vote in full parliament in March. Parliament and
lawmakers will have to agree on a common text to become law.