The ECON committee of the European Parliament is looking at market manipulation – lessons and reform post LIBOR / EURIBOR and seeking input from market participants in the form of a short questionnaire. The ACT has responded and recommended that manipulating the index (whether by rate contributors or by compilers or others) should be treated as market abuse and be brought within provisions comparable to the existing directives and regulations on market abuse.
We maintain that moving to a rate setting based mechanically of actual trading data would not of itself remove the opportunity for manipulation and in fact a system informed by actual rates but allowing for an element of judgement by contributors would produce a more representative benchmark.
