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The
EU executive arm had proposed stricter rules in 2013 but
concerns about the impact of the new regulation, particularly on
the use of U.S. benchmarks in Europe, delayed further progress
on the issue.
The deal struck early on Wednesday between EU lawmakers, the
European Commission and representatives of EU states will allow
third country indexes to continue being used in the EU "while
ensuring that European benchmark administrators will not be
disadvantaged", a statement from Luxembourg, which holds the
rotating EU presidency, said.
Foreign indexes would, however, have to apply for "recognition"
or "endorsement" to continue being used in the EU, it said.
The new rules agreed will also introduce a tailored supervision
of benchmarks "appropriate to their size and to their nature."
Several international banks have been fined since the first
rigging of Libor was uncovered in 2011. By manipulating the
indicator, banks were able to reduce losses or make higher
profits altering the pricing of financial products linked to
benchmarks, including derivatives and student loans.
When applied, the new rules will strengthen confidence in
financial markets "preventing new manipulation scandals",
Luxembourg's Finance Minister Pierre Gramegna said.
Technical aspects of the agreement still need to be sorted out,
a Commission official said, and representatives of the 28 EU
states will have formally to endorse it on Dec. 9.
(Reporting by Francesco Guarascio; Editing by Richard Balmforth)
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