Due to the recent LIBOR scandal, serious concerns have been raised about false submissions of banks' estimated interbank lending rates. Therefore, the European Commission decided to act to address this kind of market manipulation, by adopting amendments to the proposals for a Regulation and a Directive on insider dealing and market manipulation, including criminal sanctions.

The European Commission proposed EU-wide action to fight rate-fixing, because any actual or attempted manipulation of key benchmarks such as LIBOR and EURIBOR, can have a serious impact on market integrity, and could result in significant losses to consumers and investors, or distort the real economy. For this reason, it proposes to amend the proposals for a Regulation and a Directive on insider dealing and market manipulation, including criminal sanctions, initially tabled on 20 October 2011.

With this modification, the Commission is not proposing to set the minimum types and levels of criminal sanctions at this stage, but wants to require each Member State to provide for criminal sanctions in their national laws to cover the manipulation of benchmarks. Internal Market and Services Commissioner Michel Barnier stated that he has already discussed with the European Parliament and acted quickly to amend Commission's proposals, to ensure that manipulation of benchmarks is clearly illegal and is subject to criminal sanctions in all countries.

A benchmark is any commercial index or published figure calculated by the application of a formula to the value of one or more underlying assets or prices, including estimated prices, interest rates or other values, or surveys by reference to which the amount payable under a financial instrument is determined. Underlying assets or prices referenced in benchmarks can include interest rates, or commodities such as oil, provided that these determine the amount payable under a financial instrument, such as a derivative.