The move follows Barclays Bank’s record £290m fine after admitting that it had manipulated the rate. The scandal forced the bank’s chief executive, Bob Diamond, to resign and to waive his bonus.
Barnier, who oversees the EU’s financial services sector, will amend reforms to EU rules against market abuse so that potential loopholes are closed. He called the falsification of such benchmark rates a “betrayal” with potentially “systemic consequences”.
“We intend to close the regulatory gap in our proposed market-abuse legislation by including the direct manipulation of market indexes such as Libor,” Barnier said. “Anyone thinking of manipulating markets needs to know they’ll face sanctions, including possibly criminal ones.”
He added: “We intend to close the regulatory gap in our proposed market-abuse legislation by including the direct manipulation of market indexes such as Libor.”
The proposed laws would affect all 27 EU countries, but they would need to pass several stages of ratification before entering the statute books.
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