Traders found to have manipulated the Libor rate should be fined and banned from the the approved persons register according to the British Bankers Association.
A review of the Libor rate is expected to be concluded on Friday, with the managing director of the FSA Martin Wheatley said to be considering removing the BBA from the decision making process.
A leaked copy of the proposals submitted by the BBA, the organisation which currently regulates the interbank rate, has been seen by Sky News which outlines harsher penalties for rate manipulation.
Sky News reports that those found guilty of having manipulated the rate should be fined, publicly censured as well as struck off the City regulator’s approved persons register. The rate itself looks set to be overhauled completely and instead become based on trading data.
Barclays was fined £290m for its role in manipulating the Libor rate in June, leading for calls to overhaul the governance of Libor in order to restore confidence.
The Wheatley Review into Libor ruled out leaving Libor unchanged in August, calling for it to be “significantly strengthened” and for the governance to be made both more robust and transparent.
The European Commission announced in July that it was acting to make interest-rate manipulation a crime but leaving it to individual member states to decide what form criminal sanctions would take.