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EXTENSION OF LIBOR POWERS

You lost me at Libor.

LIBOR – or the london Interbank offered Rate – is a benchmark rate used to set trillions of pounds of financial contracts around the world.

Banks, including Barclays, Royal Bank of Scotland and lloyds, have been fined for rigging it – with traders trying to boost their bonuses.

So what are these powers?

last year, the Government introduced laws meaning unlimited fines and jail sentences of up to seven years for those caught manipulating libor. yesterday, the Treasury launched a consultation to extend the legislation to cover seven other benchmarks including oil, gold and currency markets.

Why is this necessary?

Authorities fear libor manipulation is the tip of the iceberg. Several banks are being investigated for rigging foreign currency markets and are expected to receive fines which may make libor penalties look like peanuts.

Barclays was fined £26m in May for fixing the gold price.

What happens now?

The consultation will run until october 23, with the Government, the Bank of England and the Financial Conduct Authority fielding opinions from the industry.

The government intends to introduce tougher rules for all the designated benchmarks by the end of the year.