Bundesbank favours Libor reform rather than replacement - paper
February 5, 2013 8:28 PM EST
The system of setting benchmark interbank lending rates, or Libor, can be reformed by tightening requirements for reporting and documenting data, Bundesbank Vice President Sabine Lautenschlaeger told a German newspaper.
The Bundesbank's view contrasts with that of German regulator BaFin, which suggested that the system of setting rates may need to be replaced.
"The safeguards at financial institutions were inadequate. That must be ended, so that a scandal like this cannot be repeated," Lautenschlaeger told the Handelsblatt newspaper in an interview on Tuesday.
The interest rate scandal broke when British bank Barclays
More than a dozen banks are now under investigation by authorities in Europe, Japan and the United States over the suspected rigging of Libor - the London Interbank Offered Rate - used to price financial instruments worth trillions of dollars globally.
Lautenschlaeger said that because the potential for manipulation of Libor and the Euro interbank offered rate (Euribor) was not adequately identified in the past, not enough attention was paid to making the rate-setting process safer.
She said investigations at some banks in Germany had been completed, but declined to provide names.
Separately, Lautenschlaeger said the finance industry should seek to ensure that "absurd bonuses" are not paid to bankers.
Lautenschlaeger said she would prefer a retention period of five years or more for large bonuses, but said any rules would need to be applied internationally to prevent German banks from suffering a competitive disadvantage.
(Reporting By Edward Taylor. Editing by Jane Merriman)
Most Popular Slideshows
- NFL MNF: Pittsburgh Steelers 30, Houston Texans 23 [PHOTOS]
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- ASUS Releases A Teaser Indicating The Arrival of New Zenfone and ZenWatch On October 28
- Boy Stoned To Death For Alleged Rape, Victim Receives Dowry From Militants
- Three Dual SIM Samsung Galaxy Note 4 Duos Variants Comes To China
- Russia is Creating Underwater Combat Robots to Protect its Arctic Territories
- ‘Lone Wolf’ Attack on Canada Parliament Hill Could be ISIS-Related
- Android Lollipop 5.0 Confirmed for Nov 3 Rollout as Nexus 6 Global Release Date is Delayed – Reports