EU plan to wrest Libor supervision "intrusive": lawmaker
By Huw Jones and John O'Donnell
LONDON/BRUSSELS (Reuters) - European Union plans to wrest from London the supervision of Libor and other benchmarks, such as those covering oil and commodities, are "intrusive" and likely to be changed, a top EU lawmaker said on Thursday.
The bloc's financial services chief Michel Barnier is due to publish his plans in coming weeks to regulate how benchmarks are compiled, aiming to stop the rigging for which three banks have been fined.
The plans are likely to raise hackles in Britain, as Brussels seeks to take on powers currently held by national regulators. But the draft law will need approval from EU states and the European Parliament, and changes are likely.
"I would be surprised if this ends up the same as it is starting out," Sharon Bowles, head of the European Parliament's influential economic and monetary affairs committee, told Reuters.
Bowles said Britain would view such direct supervision as "intrusive".
"There is a lot of sensitivity about any kind of direct supervision," said the British lawmaker, who will play a key role in finalizing the rules.
The draft law, which is unlikely to take effect before 2014, proposes that regulation of top benchmarks like Libor and oil indexes would be shifted to the Paris-based European Securities and Markets Authority (ESMA).
"Where benchmarks are critical to more than one member state ... authorization and supervision is most effectively carried out by ESMA and the proposal therefore grants ESMA the appropriate powers," the draft law obtained by Reuters said. Continued...