engleski

EU Benchmark Regulation after LIBOR manipulation

This paper examines legal and economic implications of manipulation of reference interest rate. In June 2012, the manipulation of the most significant reference interest rate - LIBOR in which participated some of the largest banks was confirmed. This, as many call it the biggest banking scandal undermined the confidence in the financial markets and investor protection, but also pointed to the lack of legal regulation of such fraudulent activities in the market. The main aim of this paper is to assess if the strengthening of the legal regulation can prevent possible further manipulation. The European Parliament’s proposal for imposing penalties for trading based on inside information and market manipulation is analyzed. The findings suggest the importance of adequate regulatory framework, not only in the national but also in the broader context. Therefore, the paper compares financial regulation in the United States and the United Kingdom and analyses the latest Regulation for Benchmark – Setting in the European Union after the LIBOR Scandal.

LIBOR manipulation, interest rates, benchmark setting, Dodd Frank Act

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