• Register
Return to: Home > News > Regulation > LIBOR regulation prompts ICAEW assurance paper

LIBOR regulation prompts ICAEW assurance paper

With the UK's new financial regulator the Financial Conduct Authority (FCA) expected to regulate the setting of interest rate benchmark LIBOR, the Financial Services Faculty of the ICAEW has published guidance on providing assurance on benchmarks and indices.

The exposure draft of the guidance, was produced as part of the debate on benchmark regulation following high-profile manipulation last year of LIBOR and EURIBOR, the interest rates at which London and European banks lend to each other. It addresses the fact that as part of expected FCA regulation, LIBOR submitters will likely be required to obtain external assurance over submissions.

ICAEW head of financial services Iain Coke commented: "The recent manipulation of LIBOR and EURIBOR will have wide ranging repercussions and potentially affect contracts worth trillions of dollars, from interest charged on loans to exotic derivatives. As a result confidence in benchmarks has been rocked recently and regulators have called for external assurance. To help regain confidence in the markets we have developed a framework to bring a level of consistency in assurance across institutions. External assurance, combined with strengthened governance and rules for the compilation of economically important benchmarks, can help restore public trust."

Coke continued to explain that the issue of assurance over benchmarks was likely to extend far beyond the LIBOR issue, and beyond the action of UK regulators. "Similar concerns have been raised over other economically important benchmarks, including in the energy and commodity markets. These have prompted a number of investigations by various market, regulatory and governmental authorities such as the International Organization of Securities Commissions (IOSCO), the European Commission, the U.S. Commodity Futures Trading Commission (CFTC), the Wheatley Review, and the U.K. Parliamentary Commission on Banking Standards."

The document, 'Guidance for the performance of assurance work on benchmarks and indices', has been published as an exposure draft open for public comment with a final draft guidance to be published in June 2013. It can be viewed from 10.00 am Wed 6 February at www.icaew.com/benchmarks

Top Content

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    FASB: a quest for simpler standards

    FASB chair Russell Golden addressed the IMA 2019 Annual Conference and Expo at the Sheraton San Diego Hotel and Marina, California, on 18 June. IMA immediate former chair-emeritus Alex Eng acted as moderator. Joe Pickard reports.

    read more

    The future of audit, and how to get there

    Two recent reports peer into the future of the audit profession. One analyses what an audit should offer, while the other looks at how the audit process will be carried out. Robin Amlôt takes a closer look at both.

    read more

    EFAA elects new president, focuses on digital future

    EFAA’s new president, Salvador Marin, outlined his key priorities for the next two years at the organisation’s 2019 annual general meeting, while outgoing president Bodo Richardt offered advice. Robin Amlôt reports.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.