WASHINGTON: The scandal of banks having manipulated the Libor global interest rate benchmark is taking a toll on confidence in the markets, the International Monetary Fund said Monday.
"The most serious consequence of this scandal, which is under investigation, is that it undermines the certainty and the trust that markets have in benchmarks," said Jose Vinals, director of the IMF's Monetary and Capital Markets Department.
"This is why it's very important that the efforts which are currently under way and which are dealing with the regulation of financial institutions be completed... (and) that these regulations are implemented without delay," said Vinals, speaking at a press conference.
Major banks are under investigation in the United States, Britain, Canada, Japan, the European Union and elsewhere for having allegedly rigged the setting of Libor and other essential interbank lending rate averages, which are used as key referents for commercial and retail interest rates in business around the world.
Barclays Bank has already been fined $452 million by US and British regulators for fixing Libor, and at least in the United States a number of lawsuits have been filed over claimed losses tied to the rate fixing.
The US Federal Reserve published documents Friday showing that there were already suspicions in the markets of manipulation of the Libor rate in 2007 and that the Fed and the Bank of England both had evidence of it in 2008.
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