Traders who rig commodity markets, such as oil and gold, could face up to seven years in prison under new laws proposed by British Chancellor George Osborne
Last week, Osborne announced the launch of a fresh investigation into corruption in the City of London, saying that those who manipulate the markets would feel the “full force of the law.”
The move comes after six of Britain’s major banks, including HSBC and the Royal Bank of Scotland were fined £2.6 billion last month for rigging the international foreign exchange market.
“The integrity of the City matters to the economy of Britain. Ensuring that the key rates that underpin financial markets here and around the world are robust, and that anyone who seeks to manipulate them is subject to the full force of the law, is an important part of our economic plan,” the Chancellor said.
Another key benchmark affected by the new crackdown is the ISDAFix, linked to around £20 trillion a year’s worth of credit interest swaps.
The law was originally introduced following the LIBOR scandal, which resulted in British banks being fined millions in 2012.
While the EU has also introduced similar laws, they will not come into effect until 2016.
The announcement follows a new poll showing that London’s most senior bankers are expecting a 21 percent rise in their bonus payouts for 2014, despite pressure from politicians and activists in light of recent scandals.