LONDON, Sept 11 (Reuters) - A draft European Union law to regulate market benchmarks like Libor has ditched an earlier plan to centralise supervision in a European agency, an EU document showed.
EU financial services chief Michel Barnier is due to publish the draft law on Sept. 18 as part of the bloc’s response to three banks so far being fined for the rigging of Libor or the London Interbank Offered Rate.
In an earlier draft leaked in June, so-called critical benchmarks like Libor which are widely used across the 28-country bloc would have been supervised by the European Securities and Markets Authority or ESMA in Paris, to the annoyance of Britain.
The latest draft backtracks on that, saying “for critical benchmarks colleges of supervisors should be formed to enhance the exchange of information and ensure uniform authorisation and supervision”.
This refers to supervisors from countries where a benchmark is widely used meeting up to take joint decisions on authorising and supervision of its compilation and use.