European parliament could penalise those involved in Libor rate fixing scandals

The announcement is particularly good news for Labour MEP Andrea McCarthy who has been campaigning for those guilty of rate fixing to face criminal prosecution.

E-mail-sign-up Donate


The European commissioner Michel Barnier has announced proposals for the European parliament to tighten rules on Market Abuse Regulation, which could lead to the prosecution of those involved.

bob-diamondThe announcement is particularly good news for Labour MEP Andrea McCarthy who has been campaigning for those guilty of rate fixing to face criminal prosecution.

McCarthy said:

“The European Parliament and Commission have moved swiftly,  in response to the public outrage against yet another abusive practice by rogue bankers,  to strengthen the Market Abuse legislation and to make rate fixing a criminal offence.

“I welcome Commission Barnier’s tough stance in his proposals today. The EU cannot be seen to be the soft option or a safe haven for what is clearly criminal behaviour.

We must ensure we have a robust legal and regulatory framework to prevent future manipulation or abuse and its potentially devastating consequences for the European and Global economy. Without this we will not end the continued crisis of confidence in banks and financial markets.”

The Libor scandal that broke last month was incredibly damaging for the reputation of the banking industry, with a number of senior figures from Barclays forced to resign.

Labour leader Ed Miliband previously called for criminal prosecutions:

“We need criminal prosecutions, we need the full force of the law brought against those who have done wrong, and if they are found guilty and if their offences warrant it, they should go to jail.

“Second, we need proper regulation of the market because the rules at the moment are clearly not being enforced or are not working. If they do not allow for criminal prosecutions, they should be changed so that can happen.”

After a vote in the Commons, Labour failed to secure a full independent inquiry, with the majority of MPs voting for a smaller, parliamentary inquiry. The Conservatives’ dismissal of an independent inquiry caused speculation around what may have been revealed via a full inquiry.


See also:

Will the SFO banking investigation succeed under the strain of government budget cuts? 6 Jul 2012

Calls grow for an independent banking inquiry, after MPs give Diamond easy ride 5 Jul 2012

Inside the world of the bankers… This is why we need a full inquiry 4 Jul 2012

Leslie: ‘Frenzied Osborne throwing around false allegations and demeaning his office’ 4 Jul 2012


Shamik Das wrote on Left Foot Forward:

For Osborne to declare that those around Brown were involved in the efforts to keep Libor down is a remarkable charge, one sure to pour petrol on the political fire raging after it was revealed that ‘senior Whitehall sources’ were behind the pressure on Barclays over Libor.

If Osborne is so certain in his accusations, why not allow a full, judge-led inquiry grill those he’s accused? Given the repeated calls from Miliband and Balls for such an inquiry they don’t fear one – unlike Osborne and Mr Cameron.


Sign-up to our weekly email • Donate to Left Foot Forward

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.