LONDON: European Union rules to regulate financial benchmarks like Libor will probably be delayed for months, a senior lawmaker said, because a key vote next week is likely to be postponed.
The European Parliament's economic affairs committee was due to vote on a draft law on Monday. But centre-left and Green lawmakers want a study of the costs and benefits of a deal on the rules that EU politicians put together. Such studies can take weeks.
"It's 90 percent certain it's going to be postponed on Monday," said a spokesman for Sharon Bowles, the British Liberal Democrat who chairs the committee and who helped arrange the deal on the draft law.
The rules would govern indices and benchmarks like the London Interbank Offered Rate, or Libor, the credibility of which is under fire. Several banks have been fined a total of $6 billion so far for rigging Libor, which is used to set interest rates for products ranging from credit cards to home mortgages.
An impact study would probably mean no vote until autumn. Parliament goes into recess in April, before elections in May. Legislative business would then remain largely on hold until a new European Commission is appointed by November.
The centre-left and Green lawmakers also want a legal opinion because they object to the key role Bowles has accorded the EU's securities watchdog, the European Securities and Markets Authority, in her proposed compromises.
Under the deal put together by Bowles, "critical" and "major benchmarks" are defined so they encompass Libor. However, ESMA would determine if hundreds of other market benchmarks, such as those used in oil, commodity and stock markets, come under the EU rules.
The source said the impact study and legal opinion could be a tactic to delay a vote in the hope of getting a stricter set of rules in the new parliament.
Bowles is not standing at the next election. EU states have joint say on the rules and have yet to reach a position among themselves.- Reuters
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