Prospectively only, it seems. But we see “criminal” and “banking” in the same sentence so rarely in official circles that this is a welcome development. We’ve pointed out in the past that the Eurozone has been much more willing to talk and even occasionally get tough with bankers. They’ve been more serious about considering transaction taxes and imposed tough rules on private equity funds (most important being limits on leverage, so they will leave fewer bankrupt carcasses in their wake).
From the Independent:
The European Commission is set to make interest rate-rigging a criminal act in the wake of the Libor scandal.
In amendments to the Market Abuse Directive to be announced on Wednesday, it is expected that the Commission President, Jose Manuel Barroso, and financial services commissioner, Michel Barnier, will ensure that anyone caught rate-rigging will be jailed.
There has been frustration that the UK’s Financial Services Authority and the Serious Fraud Office have appeared toothless over the Libor manipulation, which helped Barclays traders hide losses and improve their financial positions. Thus far, only Barclays has been fined, £291m, though FSA chairman Lord Turner is preparing a hard-hitting speech attacking the City’s debased culture on Tuesday.
The European Parliament is also tabling amendments that will focus on making Libor and other potential areas for rigging, such as currency trading, criminal acts. Separately, the commission might also look into whether rate-rigging counted as cartel activity.
NC readers should also be cheered by the report in this piece that the efforts of the banksters to have an international settlement are pretty certain to go nowhere.