Libor-Like Manipulation Possible in Other Benchmarks- Goldman’s Gensler to Investigate

Bloomberg writes today that authorities are scrutinizing other benchmarks and markets for signs of manipulation in the wake of the LIBOR scandal.
Don’t worry, Goldman’s own Gary Gensler is on the hunt…just as soon as he gets around to completing the going-on-5-year silver investigation supposedly being conducted by the CFTC, which was supposed to have been concluded by September.


The same lack of oversight that enabled traders to manipulate the London interbank offered rate plagues other benchmarks around the globe, according to a group of international securities regulators.

Fewer than half of the benchmark interest rates surveyed in the U.S., Europe and Asia were based on actual transactions, according to a confidential International Organization of Securities Commissions discussion paper obtained by Bloomberg News. Instead, the rates were calculated by methodologies that were unclear, not transparent and only rarely subject to specific regulatory standards or obligations, the group said.

Scrutiny of financial benchmarks has intensified since June, when Barclays Plc (BARC), the U.K.’s second-largest bank by assets, agreed to pay $460 million for its role in trying to manipulate interest rates. In a global probe that has ensnared banks including UBS AG (UBSN), Citigroup Inc. (C), Royal Bank of Scotland Plc and Deutsche Bank AG, investigators have focused on whether traders coordinated submissions to the survey-based rate to profit from derivatives positions.
Last week, IOSCO created a task force to develop policy guidance on how benchmarks should be compiled and regulated. The exercise, which is being led by Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, and Martin Wheatley, managing director of the U.K. Financial Services Authority, follows a similar effort to establish best practices for reporting oil prices.
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