2013.06.1406:35:53UTC+00FX rates said to face global regulation in libor review

Global regulators may start regulating currency rates in a widening response to benchmark-rate setting scandals that started with revelations on the manipulation of Libor, according to two people familiar with the matter.

Libor Oversight

The FCA “will review” Iosco’s recommendations and decide which rates to oversee, spokesman Chris Hamilton said. Martin Wheatley, the regulator’s chief executive officer, has already taken on oversight of the London interbank offered rate after his review of how the rate is set.

State Street

The data are collected and distributed by World Markets Co., a unit of Boston-based State Street Corp., and Thomson Reuters Corp. Bloomberg LP, the parent company of Bloomberg News, competes with New York-based Thomson Reuters in providing news and information, as well as currency-trading systems and pricing data. Bloomberg LP also distributes the WM/Reuters rates on Bloomberg terminals.

EU Response

Britain should investigate the manipulation of currency rates, European Union officials said after Bloomberg News revealed that traders have been rigging foreign-exchange benchmarks for more than a decade.

“They need to get to the bottom of it,” Sharon Bowles, 60, chairwoman of the European Parliament’s economic and monetary affairs committee and a member of the U.K. Liberal Democrat party, said in an interview. “It’s quite upsetting we have got another bad-news story. It’s time we managed to restore the reputation of our banks.”

Tensions between Britain and its EU partners about oversight of the financial industry have intensified after three banks were fined about $2.5 billion for rigging Libor. The European Commission is considering whether to move oversight of Libor away from the U.K. to a Paris-based EU watchdog.