The Daily Telegraph
EU urged to relax rules on markets
EUROPE’S financial markets risk being plunged into disarray if Brussels fails to overhaul rules created in the wake of the Libor-rigging scandal, top finance trade bodies have warned.
Six financial lobby groups have said that the EU’S markets will face “significant disruption” at the end of next year if Brussels does not water down its rules governing financial benchmarks.
The so-called Benchmark Regulation (BMR) rulebook was introduced after traders were found to be fixing Libor interest rates for their own benefit more than a decade ago.
Libor, or the London Interbank Offered Rate, has been used since the 1980s as a benchmark for lending between banks but is being phased out after the misconduct was uncovered.
BMR rules were intended to ensure robust governance of benchmarks and indices used in financial services to price assets and measure the performance of investments.
However, the trade bodies warned that the EU’S rules are excessive and investors on the Continent could suddenly lose access to foreign benchmarks when a transition period concludes at the end of next year.
Under the current regime, EU investors can access around three million global guides, but there are concerns that Brussels will block access to a raft of foreign benchmarks when the transition period ends.
Instead, they recommended reversing the prohibition on the use of thirdcountry benchmarks and enabling benchmarks to be used in the EU unless specifically prohibited.