Fines for the manipulation of Libor may not be the end of the story as regulators in other jurisdictions investigate their national benchmark interest rates, according to Kevin Milne, CEO of Rate Validation Services.
Libor continues to hit headlines with Rabobank fined $1 billion this week and its CEO, Piet Moerland, forced to step down for its part in the rate-fixing scandal.
However, Libor is just one of around 50 ‘ibors’ which benchmarks interbank offered rates in a variety of countries and currencies, and Milne said regulators are now turning their eyes to these lesser known areas.
"Libor has been getting a lot of attention because it's the most widely used of these benchmarks, but there are dozens of other ibors based on other currencies, and different jurisdictions are now looking at these to see if there has been manipulation and if they can better administer them," he said.
Milne is currently working closely with NYSE Euronext, which has been chosen to take over the administration of Libor from the British Bankers Association and UK regulators to improve the accuracy and reliability of Libor, but has also spoken to other regulators that are hoping to do the same for their local benchmark rate.
With regulators examining these other benchmarks, Milne said it’s likely that they may uncover further evidence of manipulation.
"We may well see more and even bigger fines if there has been manipulation of these other benchmarks across Europe and Asia," he added.
Earlier this week, the International Organization of Securities Commissions (IOSCO) urged benchmark administrators to adopt its principles for financial benchmarks by July 2014.
The principles have been approved by the Group of 20 countries and the Financial Stability Board. IOSCO said adoption of the 19 principles will improve the integrity of benchmarks, including ibors.