Martin Wheatley said that the Financial Services Authority should regulate the Libor system, and that in extreme cases riggers should be prosecuted, reports the Guardian newspaper.

Painful fine

In the wake of the £290 million fine handed out to Barclays for manipulating the rate, the regulator added that other institutions should expect similar punishments. Mr Wheatley also called for the law to be changed to make it an offence to make false or misleading statements to influence Libor, as although the firms involved in the rates are regulated, the market itself is not.
‘I think society has lost confidence in banks,’ said Mr Wheatley. ‘We're going to be on the front foot. This would enable the FSA to use criminal powers for the worst cases of attempted manipulation.

Alternatives

Although Mr Wheatley concluded that the Libor system could be preserved, he also called for an international discussion to consider alternatives, a statement welcomed by Dan Doctoroff, the president of Bloomberg, who commented: ‘I agree with the observation that Libor cannot be immediately replaced, but must be immediately reformed.’