The Government launched its public consultation on the regulation of the London Interbank Offered Rate (LIBOR) today.
The consultation seeks the views of industry and the public on legislation to implement the key recommendations of the Wheatley Review of LIBOR, which the Government accepted in full last month.
The Government is committed to restoring the confidence of this crucial international benchmark. It has taken swift and decisive action to make sure that this happens as quickly as possible. The publication of draft secondary legislation is another important step towards this objective.
The consultation paper invites comment on two pieces of secondary legislation:
- bringing LIBOR within the scope of regulation
- making the manipulation of LIBOR a criminal offence
The Government is committed to implementing the recommendations as soon as possible by amending the Financial Services Bill, which is currently before Parliament. The Bill is expected to receive Royal Assent by early 2013, subject to the Parliamentary timetable.
The final chapter of the consultation discusses the potential for other benchmarks to be covered by secondary legislation. Additional benchmarks could be included within the scope of regulation or the application of the criminal offence.
The consultation closes on 24 December 2012.
The Financial Secretary to the Treasury, Greg Clark said:
The Government is committed to restoring global confidence in this important benchmark.
The Government has acted swiftly and is implementing Martin Wheatley’s recommendations as quickly as possible - introducing legislation that brings LIBOR within the scope of regulation and creating new criminal sanctions for attempted manipulation of LIBOR.
Recent events have illustrated that LIBOR might not be the only benchmark subject to attempted manipulation. We are consulting on whether further benchmarks should be brought within the scope of regulation.
Notes for editors
The public consultation on the regulation of the London Interbank Offered Rate (LIBOR) can be found here: Implementing the Wheatley Review: draft secondary legislation
The Government responded to ‘The Wheatley Review of Libor’ on 17 October 2012: The Government’s response to the Wheatley Review of Libor
The final report ‘The Wheatley Review of Libor’ was published on 28 September 2012: The Wheatley Review of Libor: final report (PDF 1MB)
The Wheatley Review published a discussion paper on 10 August 2012: The Wheatley Review into LIBOR: initial discussion paper (PDF 480KB)
The Government set up an independent review on the regulation of Libor in July 2012 and asked Mr Wheatley (CEO designate of the Financial Conduct Authority) to be chair. It reported to the Cabinet Committee on Banking Reform, chaired by the Chancellor, with the Secretary of State for Business, Innovation and Skills as Vice-Chair, on 28 September 2012.
The necessary changes to primary legislation have already been included in the Financial Services Bill.
Further information about the review, including its terms of reference, can be found in The Wheatley Review section of the HM Treasury website.