On June 6, the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) published their final report setting out principles for benchmark-setting processes in the EU (ESMA/2013/659).  The final report is divided into seven sections: General framework for benchmark setting; Principles for benchmark administrators; Principles for benchmark submitters; Principles for benchmark calculation agents; Principles for benchmark publishers; Principles for benchmark users and Principles for the continuity of benchmarks.

• The inter-bank lending rate, Libor, is one benchmark that will be affected by this report.
• Libor is the inter-bank offered rate currently set in London and is meant to reflect the average rate that banks pay to lend to each other.

The report follows the Libor scandal which emerged in June 2012 when UK and US authorities fined Barclays £290m for fixing the key inter-bank interest rate. Since then, Swiss bank UBS and Royal Bank of Scotland have been given fines of £940m and £390m, respectively.  Final Report.