Firms still failing to fully manage benchmark risks

Posted at July 30, 2015 | Categories : News

The Financial Conduct Authority (FCA) is not altogether happy with progress on improving the oversight and controls around benchmarks.

Apparently, the lessons learned from the LIBOR, Forex and Gold cases have been uneven across the financial sector and often lacking the urgency required, given the severity of recent failings.

The regulator intends to:

  • continue to strengthen governance and oversight of benchmark activity;
  • continue to identify and manage conflicts of interest;
  • fully identify their benchmark activities across all business areas;
  • establish oversight and controls for any in-house benchmarks where they have not done so; and
  • implement appropriate training programmes.

Tracey McDermott, director of supervision – investment, wholesale and specialists at the FCA, comments: “We have seen widespread historic misconduct in relation to benchmarks. It is now critical that firms act to restore trust and confidence in the system.”