Sept. 17 (Bloomberg) -- Global regulators and central bankers debated tougher oversight of interbank lending rates in the wake of the scandal engulfing Libor, according to an EU official.
The steering committee of the Financial Stability Board weighed how to coordinate nations’ response to the manipulation of Libor during a conference call today, the official said. The FSB is scheduled to meet in Tokyo on Oct. 11-12.
FSB Chairman Mark Carney told reporters last month that the FSB would seek to ensure that “the world transitions to a better version of reference rates” with “buy-in globally.”
Confidence in Libor, the benchmark interest rate for more than $500 trillion of securities, plummeted following Barclays Plc’s admission that it submitted false rates. The revelations have provoked renewed calls for tougher oversight of the financial system and pushed regulatory probes of interbank lending rates to the top of the political agenda.
EU representatives on today’s call outlined steps the 27-nation bloc is taking in the wake of the Libor scandal, including a bolstering of market-abuse sanctions and a consultation on overhauling governance of how market benchmarks are set, said the official, who wouldn’t be cited by name because the talks are private.
Barclays, the U.K.’s second-largest bank by assets, was fined 290 million pounds ($472 million) in June for its role in rigging Libor for profit. Chairman Marcus Agius, Chief Executive Officer Robert Diamond and Chief Operating Officer Jerry Del Missier subsequently resigned.
The International Organization of Securities Commissions, which represents regulators in more than 100 countries, last week announced a task force to investigate benchmarks such as Libor after allegations banks rigged the rate.
Financial Services Authority Managing Director Martin Wheatley and U.S. Commodity Futures Trading Commission Chairman Gary Gensler will oversee the IOSCO group, which will develop global policy guidance and principles for the setting of such rates.
Bank of England Governor Mervyn King said earlier this month that global central bankers had agreed to set up an inquiry into Libor.
The FSB steering committee has 40 members including U.K. Financial Services Authority Chairman Adair Turner and Daniel Tarullo, a governor of the U.S. Federal Reserve, according to the board’s website.
The board brings together central bankers, regulators and finance ministry officials from the Group of 20 nations.
European Parliament lawmakers will hold a public hearing on Sept. 24 into the Libor scandal.
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