The European Parliament has given the green light for seriously cracking down on market manipulation and insider dealing. Rogue traders could soon be handed prison terms rather than just being fined.
Voting 618 for and just 20 against on Tuesday, the European Parliament overwhelmingly approved new financial market rules that reflect deep-seated suspicions among lawmakers about the sector blamed for the 2008 global economic crash.
With outrage lingering across the EU's 28 member states over manipulation of interest rate benchmarks such as Euribor and Libor, legislators didn't hesitate to vote in favor of prison for serious market fraudsters, with the minimum jail term to be four years.
"Since the financial crisis in 2008, serious cases of abuse and manipulation have come to light, but no one has gone to jail," said British MEP Arlene McCarthy who steered the legislation through the European Parliament.
Removal of loopholes
The EU also put in place administrative sanctions, allowing for a maximum fine of 5 million euros ($6.76 million) for rogue trading.
"Those who practice a culture of cheating with other people's savings will no longer be able to exploit regulatory loopholes in Europe," EU Justice Commissioner Viviane Reding said.
The draft legislation now goes to the bloc's member states for formal approval, with full implementation to take at least two years.
hg/mkg (AFP, dpa)