BRUSSELS (AP) — The European Union is proposing to make it a crime to manipulate key global interest rates, as some banks have been accused of doing.
European Commission vice president Viviane Reding said Wednesday that public confidence in the financial sector had nose-dived after the latest revelations about manipulations by banks of key lending rates, such as the so-called LIBOR.
The London interbank offered rate (LIBOR), and the related European interbank offered rate (EURIBOR), are benchmarks for over $500 trillion in global contracts, including loans and mortgages.
Reding said EU action "was needed to put an end to criminal activity in the banking sector and criminal law can serve as a strong deterrent."
The EU did not propose what specific sanctions rate-rigging would take, saying that would be up to member states.