MP Comments on LIBOR Rates
Posted by Stewart Hosie, MP for Dundee East, at 16:38, Wed 6 February 2013:
Speaking in today's debate at Westminster on the fines for the Royal Bank of Scotland and the future of the regulation of LIBOR rates, Stewart Hosie MP, SNP Treasury spokesman said:
"I welcome the statement, in particular the fact that the fines will be paid by the banks and not the taxpayer, and I also very much welcome the fact that the BBA will no longer have anything to do with LIBOR.
"However it is not just who calculates LIBOR it is how. So can the Minister update the House and tell us how we will have transparency and confidence to know that the rates submitted by the banks are actually the rates at which they can borrow money, rather than the acts of fiction – the fixes and the fiddles - which we saw over many years with many banks?"
Responding to Mr Hosie, Greg Clark the Financial Secretary to the Treasury, said: "The honourable gentleman makes an excellent point. One of the recommendations of the Wheatley review was that there should be objectivity in the setting of LIBOR benchmarks."
"In the new regulated conduct of LIBOR setting, there will be a requirement to route the reporting of rates in transactions which are visible to the Financial Services Authority so that the opportunity to 'parler' the commercial interest of particular banks into what is supposed to be an objective rate will no longer be there."
Commenting on the debate, Stewart Hosie added: "I am delighted that the taxpayer will not have to pay for the wrongdoing of others and that bonuses will be clawed back in order to pay these fines. It is also a matter of great relief that real action is now being taken to ensure that the LIBOR rates will be robust and trusted."
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