The same lack of oversight that enabled traders to manipulate the London interbank offered rate plagues other benchmarks around the globe, according to a group of international securities regulators.
Fewer than half of the benchmark interest rates surveyed in the U.S., Europe and Asia were based on actual transactions, according to a confidential International Organization of Securities Commissions discussion paper obtained by Bloomberg News. Instead, the rates were calculated by methodologies that were unclear, not transparent and only rarely subject to specific regulatory standards or obligations, the group said.
The discussion paper was in part based on an informal review by an ad hoc group of member regulators of benchmarks that are set in their jurisdictions. The members of the group included regulators from the U.S., U.K., Germany, France, Japan, Hong Kong and Australia, according to the document.