British finance minister George Osborne will reject European Union plans to outlaw currency market manipulation on Thursday and instead set out his own proposals to make rigging exchange rates a criminal offence.
EU laws taking effect in 2016 will make it a criminal offence with a four-year jail term to rig key prices in a wide range of financial markets.
But Osborne does not want these laws to apply in London, the world’s biggest center for currency trading.
Instead, he wants a panel led by the Bank of England to recommend new criminal sanctions which meet the needs of London, where much of the loosely regulated $5-trillion-a-day trade in foreign exchange takes place.
Britain has already introduced a maximum seven-year jail term for trying to manipulate the LIBOR interbank interest rate, and plans to introduce similar criminal penalties for rigging benchmarks in currency, commodity and fixed income markets.
“Our own rules will be as strong or stronger than those of the EU, but will preserve flexibility to reflect specific circumstances in the UK’s globally important financial sector,” Britain’s finance ministry said in a statement late on Wednesday.