Last updated: September 18. 2013 6:36AM - 227 Views
Associated Press

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(AP) The European Commission is seeking to regulate financial benchmarks to prevent market manipulations such as the one involving LIBOR, a critical interest rate banks use to borrow from each other.

The Commission, the executive arm of the 28-nation European Union, on Wednesday unveiled the draft legislation that tightens oversight and introduces stiff fines for manipulations.

Under the proposal, national regulators and a coordinating European body are granted new powers to investigate possible rigging and can issue fines of up to 10 percent of a firm's revenue.

Regulators have accused traders and financial firms of manipulating LIBOR to gain financial advantages. The London interbank offered rate, or LIBOR, underpins trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans.

Associated Press
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