Regulators have plans to toughen bank rules at summit

GLOBAL regulators want to draw up plans to try to tighten their grip on banking markets at a summit in London next month, according to Financial Conduct Authority chief executive Martin Wheatley.

The hefty penalties on British, American and Swiss banks for manipulating interest rates and currencies have forced authorities to rethink regulation for a chunk of the market hitherto left to discipline itself, said Mr Wheatley.

“Spot gold, spot Forex, Libor, all of them took us outside areas we had been historically regulating,” he said.

“We have moved that regulatory perimeter through enforcement activity, but what the market is now saying is help us catch up by giving us something which tells us how you expect us to operate.”

Britain and the European Union have now made rigging benchmarks, including Libor, a criminal offence but Mr Wheatley said standards for “navigating the nuances” of such market segments were also needed.

Plugging this gap starts next month when the FCA hosts the annual meeting of the International Organisation of Securities Commissions, an umbrella body for regulators such as BaFin in Germany and the US Securities and Exchange Commission. The two-day meeting starts on Wednesday, June 17.

Mr Wheatley also co-chairs Britain’s Fair and Effective Markets Review (FEMR), which publishes findings on June 10, to improve conduct standards in currency, commodity and fixed income markets to make misconduct more difficult.

He said those recommendations must become a template for global action.