Tail Wagging the Dog: The Manipulation of Benchmark Rates – A Competitive Bone of Contention

34 Pages Posted: 20 Sep 2016 Last revised: 23 Sep 2016

See all articles by Alexander Pascall

Alexander Pascall

Skadden, Arps, Slate, Meagher & Flom LLP

Date Written: June 7, 2016


The manipulation of financial benchmarks, such as the London Interbank Offered Rate (Libor), has resulted in swift enforcement by regulators across the globe and the imposition of a multitude of impressive fines. In 2013, the European Commission settled with eight financial institutions for EUR 1.7 billion for their role in an alleged cartel relating to interest rate derivatives pegged to Libor. This article seeks to analyse the manipulation of financial benchmarks under Article 101(1) TFEU from both an economic and legal perspective. It is hoped that this exercise will shed some much needed light on what remains a relatively obscure area in competition law. Following the analysis herein, it is argued that EU competition law, in its current guise, is not well placed to deal with the mischief at issue. In light of the specificities of Libor and the markets in which products indexed to Libor are traded, the manipulation should, instead, be left to market regulatory tools specifically designed for this purpose.

Keywords: Antitrust, Competition, Libor, Benchmarks, Derivatives, Manipulation, Interest Rates, Swaps, Information Exchage, 101, 102, TFEU

Suggested Citation

Pascall, Alexander, Tail Wagging the Dog: The Manipulation of Benchmark Rates – A Competitive Bone of Contention (June 7, 2016). World Competition: Law and Economics Review, Vol. 39, No. 2, (2016), Available at SSRN: https://ssrn.com/abstract=2836876 or http://dx.doi.org/10.2139/ssrn.2836876

Alexander Pascall (Contact Author)

Skadden, Arps, Slate, Meagher & Flom LLP ( email )

1440 New York Avenue
Washington, DC 20005
United States

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