Europe votes to jail bankers who manipulate the markets

JAIL terms for bankers manipulating financial markets were backed by MEPs in a vote in Brussels yesterday.

Labour Euro MP Arlene McCarthy, whose report calling for tougher market abuse rules was approved overwhelmingly by members of the European Parliament’s economic and social affairs committee, said: “The vote is a clear signal that the European Union is not a soft option or safe haven for perpetrators of market abuse.

“For the first time we are introducing EU-wide criminal sanctions, including jail terms, for those intent on committing market abuse.”

The European Commission first proposed stricter laws last year, but it updated the plan this summer after revelations that banks were falsely fixing the interbank interest rate – known as Libor – to boost their profits from trades.

It had direct consequences on mortgage rates and other interest levels for ordinary borrowers and further damaged bankers’ reputations in the wake of the economic crisis.

Yesterday’s vote reflects EU determination to strengthen the fight against market abuse and reinforce European regulators’ investigative powers and penalty options.

The vote came after delivery to MEPs of a 720,000-signature petition endorsing harsher sanctions against bankers who break the rules.

GEOFF MEADE