Following LIBOR manipulation, the European Commission launched a public consultation on possible new rules for the production and use of indices serving as benchmarks in financial and other contracts. The contributions can be made until the 15 November.

A public consultation which covers all benchmarks, not just interest rate benchmarks such as LIBOR but also commodities and real estate price indices for example and seeks to identify possible shortcomings at every stage in the production and use of benchmarks, has been launched by the Commission. The ultimate objective of this consultation is to ensure the integrity of benchmarks. All options are on the table but any solution should guarantee that benchmarks are not subject to conflicts of interest, reflect the economic reality that they are intended to measure and are used appropriately. The Commission has already acted quickly to amend its legislative proposals on market abuse.

In particular, the consultation which will run until 15 November, comprises 5 chapters covering the scope, process and nature of indices and benchmarks, governance and transparency in the use of actual transaction data, the purpose and use of benchmarks, the provision of benchmarks by private or public bodies, and the impact of potential regulation, including transition, continuity and international uses issues.

Commissioner for Internal Market and Services Michel Barnier stressed the importance of the consultation. He also added that doubts about the accuracy and integrity of indices can undermine market confidence, cause significant losses to consumers and investors, and distort the real economy. It is therefore essential that steps are taken to ensure the integrity of benchmarks and the benchmark-setting process.