Tackling the culture of manipulation:
Lieu: Brussels, Belgium - European Parliament
End production: 24/09/2012 First transmission: 24/09/2012
- extracts from the Public Hearing
EP committee on Economic and Monetary Affairs
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior shot of the European Parliament, Brussels, Belgium (1 shot)
||ECON comittee, arrival of participants of the Public hearing, (3 shots)
||SOUNDBITE (English): Gary GENSLER, Chair of the U.S. Commodity Futures Trading Commission (CFTC): (speaking from the U.S. - live video transmission): "There are no rules regarding controls and fire walls and independent testing in alike and also there are not specific controls to prevent banks from intentionally or unintentionally hurting together in reporting the same or similar rates. And I think the 3rd issue with LIBOR (London Interbank Offered Rate) which is inherent with a lot of pieces in the banking world is that there are inherent conflicts of interests and we should just recognize this, but there are trading positions that benefit from the submissions and we need to manage the conflicts properly."
||SOUNDBITE (English): Gary GENSLER, Chair of the U.S. Commodity Futures Trading Commission (CFTC): (speaking from the U.S. - live video transmission): "In the last view years there had been a lot of volatility as we know; but in LIBOR it is far more stable than in any comparable rate, further if we look at individual submitter and even if we look into 2012 it is remarkable stable and in fact 85 percent of the days where 5out of 6 days, we find that LIBOR submitters don't change their rate at all. And 4th as Libor represent unsecured borrowing one would think that it should reflect a credit spread that's the risk of a bank failing. In looking at the publicly available data of at least 14 of the submitting banks and looking at one year borrowing rates that they submit for LIBOR and comparing it to one year credit default swaps, they are not aligned."
||SOUNDBITE (French): Michel BARNIER, European Commissioner for internal market and services: "We need a genuine cultural change, we have to reinforce the governance, transparency with these types of instruments covering all relevant issues, we have to look at the methods as we tackle the role of institutions, the ability of public authorities to monitor and to regulate."
||SOUNDBITE (French): Michel BARNIER, European Commissioner for internal market and services:
Everything is possible the only thing which isn't possible is self regulation as status quo as these indices play a too important role in the financial system, for us to leave them in a self regulatory limbo."
||Andrew FARRELL, Head of the Commercial Litigation Department at JMW Solicitors in Manchester, UK:
"We had a number of client's inquires of course in nature of our own behalf, the manipulation of LIBOR (London Interbank Offered Rate) had on business costs. The issues was considered in the context what remedy may be available in the terms of duty owed by banks to their customers as a matter of principle, but in practise the cost benefit, taken into actions that most SME's don't find it cost beneficial to seek legal address."
||Andrew FARRELL, Head of the Commercial Litigation Department at JMW Solicitors in Manchester, UK: "It is very difficult to draw any different conclusion than that the attitude of banks towards their customers has been more of little regard for their best interests and there has been purely a culture of sales targets, profits and bonus criteria being met, resulting lack of trust that the majority of SME's have towards banks is one of the key challenges that banks must address forward."
||SOUNDBITE (English): Gary GENSLER, Chair of the U.S. Commodity Futures Trading Commission (CFTC): (speaking from the U.S. - live video transmission): "If you have real transaction than there is less degrees and there is less room for mystery and miss-conduct. And I think it is critical that we have a wide public debate and if LIBOR has not enough real transactions in this unsecured inner-bank market then it does possibly lead to a replacement."
||cut away shots (5 shots)