The "Financial Times" has said the European Commission is considering stripping London of its control over the scandal-hit Libor lending rate. It said supervision would be handed over to Paris in the near future.
The EU executive was planning to hand over Libor lending rate supervision to the Paris-based European Securities and Markets Authority (ESMA), the "Financial Times" said in its Thursday edition.
The newspaper cited a corresponding draft proposal by the European Commission saying that countries running Libor, Euribor and other critical benchmarks in the 27-member bloc would be under the direct control of ESMA.
The "Financial Times" said the regulation was due to be published this summer, but added that it might not be passed into law before next year's European parliamentary elections.
Stricter rules required
Libor is an interbank lending rate which is set by 16 global banks giving daily estimates of how much it would cost them to borrow funds from other lenders for varied periods of time.
Barclays, the Royal Bank of Scotland and others have already paid more than $2 billion (1.5 billion euros) to end the scandal-related investigations. European officials have been weighing reforms to safeguard the integrity of Libor.
"Our proposal will establish rules of good governance to ensure greater transparency and manage conflicts of interest," the office of European Regulation Commissioner Michel Barnier said in a statement. "There will also be penalties for non-compliance with established principles."
hg/kms (Reuters, AFP)