Brussels, 21/09/2012 (Agence Europe) - The Finance Watch organisation, a consumer financial interests pressure group, is calling on the European legislator to provide external regulatory oversight of benchmark setting and rules to limit conflicts of interest in the benchmarking process. Finance Watch secretary general Thierry Philiponnat commented: “When a small group of private actors (panel contributors) works together with a single private interest body (trade organisation or an index/commodity price publisher) to set rates with implications for the economy and the global financial system, then the public interest will be at best ignored and at worst exploited, as we have seen. This situation is inherently unhealthy. If we are to restore trust in the financial system, supervisors must be able to control conflicts of interest. This includes situations where an entity can be both judge and jury.”
On Monday 24 September, the European Parliament's Economic and Monetary Affairs Committee held a public hearing on manipulation of the LIBOR benchmark in the United Kingdom, which has driven the European Commission to change its draft regulation on market abuse to make manipulation of LIBOR and other benchmarks a crime (see EUROPE 10663). In its response to a preliminary questionnaire from the Parliament, Finance Watch calls for external regulatory oversight of benchmark setting; greater use of transaction data credible structures for governance and accountability transparency and openness in the benchmarking process; greater use of transaction data in forming benchmarks; and credible governance structures to boost transparency and democratic responsibility. (MB/transl.fl)