Bankers could face jail if they rig market benchmarks

 

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The Independent Online

Rigging the benchmarks for gold and silver, foreign exchange and oil will become criminal offences, the Government said yesterday.

Traders found guilty of manipulating seven key financial market benchmarks could face jail sentences and huge fines, in line with the legislation rushed in to cover the Libor scandal.

The Economic Secretary to the Treasury, Andrea Leadsom, said: “The integrity of the City matters to the economy of Britain. Ensuring that the key rates that underpin financial markets are robust, and that anyone who seeks to manipulate them is subject to the full force of the law, is vital.

“That’s why the Government is determined to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them.”

Ms Leadsom launched a one-month consultation period yesterday.

In his speech at the Mansion House in June, the Chancellor, George Osborne, announced his plans to extend the criminalisation of financial benchmark rigging from Libor to other areas.

In the wake of the Libor rigging scandal, ten firms have been fined $6.5bn (£4bn) by global regulators for manipulating the key interest rate benchmark.

The measures announced by the Government yesterday would extend the rules to cover two more interest  rate benchmarks used in the swaps markets, the foreign exchange 4pm London fix, the ISDA fix used for interest rate swaps, ICE gold and  silver fixes, and the Brent oil futures contract. Between them they account for billions of pounds of derivatives trades every day.

The Government’s move came as it emerged that the Serious Fraud Office (SFO) has stepped up its investigation into Barclays’ £5.8bn cash injection from Qatar at the height of the financial crisis.

The police have served Section 2 notices demanding evidence from four former Barclays directors who were on the board at the time of the 2008 fundraising. These are reported to be directors who have not yet been interviewed by the SFO.

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