Brussels, 18/09/2013 (Agence Europe) - On Wednesday 18 September, EU Internal Market Commissioner Michel Barnier defended the draft regulation to boost governance in the drawing up of financial benchmarks following the scandals surrounding cheating on the LIBOR and EURIBOR benchmarks (see EUROPE 10922).
The most recent draft of the regulation, unlike the previous version of June 2013, does not give the European Securities Management Authority (ESMA) supervision powers for important benchmarks, which will now be supervised by national bodies (British for LIBOR and Belgian for EURIBOR) acting in special colleges of supervisors for cross-border risks.
Barnier argued that ESMA already has a lot of work to do, but will act as mediator without being swamped.
MEP Sven Giegold (Greens/EFA, Germany) is unhappy with the changes made by the Commission, arguing: “In the face of serious opposition from London, which objected to losing control over LIBOR, the Commission has instead proposed leaving supervision to national authorities. As a bare minimum, there should be European level supervision of EURIBOR (the European interbank rate). Once again, the Commission has kow-towed to narrow national interests leaving the fox in charge of the henhouse”. He added: “The official line - that the European Securities and Markets Authority does not have the capacity to take over this new role - is a feeble excuse. (...) The European Parliament must now seek to revise the Commission's half-hearted proposals, to ensure we have a proper regulatory response to the LIBOR and EURIBOR scandals. This implies ensuring European supervision of key benchmarks”.
Barnier said tighter regulation would not encourage banks to stop becoming involved in the setting of benchmarks and promised that, once the new rules were in place, he would work to ensure the equivalence of rules set outside the EU (in the United States, for example) with the EU regulations. (EL/transl.fl)