Getting a Grip on Benchmark Contributions
A discussion of the issues surrounding bank-contributed market information for benchmarks and indexes.
Recent scandals involving bank-contributed financial information – most notably 2010’s discovery of fraudulent contributions to the widely used the London Inter-Bank Offered Rate (LIBOR) benchmark – have underscored the lack of transparency and lack of control of the rates and prices financial institutions contribute to industry benchmarks and indexes.
They’ve also cost the banking industry dear, with recent fines relating to LIBOR alone exceeding $7 billion and the Financial Times predicting an eventual total of as much as $22 billion!
In response to the ensuing public outrage, regulators are starting to act. Several have prescribed new measures to safeguard a repetition, and many institutions are assessing what they should be doing to ensure their contributions are accurate, timely and honest.
This free discussion paper, from data management specialist Skyler Technologies, looks at the challenges of ensuring consistency of contributed data, and offers guidance on key steps firms can take to ensure they don’t fall foul of incoming regulations.