Financial markets: MEPs aim to make LIBOR and other benchmarks more trustworthy
"Critical” benchmarks such as the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR), influencing financial instruments and contracts with an average value of at least €500 billion, should become more reliable when Parliament votes in new legislation on Thursday. The law aims to clean up the benchmark-setting process, improve transparency, and prevent conflicts of interest like those that led to the LIBOR rigging scandals of recent years.
Manipulating benchmarks such as LIBOR or EURIBOR undermines market confidence, distorts the economy, reduces investors’ profits and inflates mortgages and loans. Other benchmarks similarly influence currency markets.
An informal deal on benchmarks to be confirmed by the plenary vote on Thursday was struck by negotiators from Parliament's Economic and Monetary Affairs Committee and the Council in November last year. The negotiators decided to create three categories of benchmarks, subject to different supervisory regimes depending on how much influence they have over the stability of financial markets.
Procedure: Co-decision (ordinary legislative procedure, first reading agreement)
Vote: Thursday, 28 April
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