Can competition law aid the United Kingdom in its fight against financial crime?

Abstract

This article investigates the laws used in the United Kingdom (UK) to enforce the financial crime of benchmark interest rate manipulation, the most well-known example of which took place in the London Interbank Offered Rate (LIBOR) and the Foreign Exchange (FX) benchmark manipulation scandal in 2012. The LIBOR and FX scandal followed hard on the heels of the 2007/2008 financial crisis and involved bankers from different banks working together to manipulate benchmark interest rates for their own gain. Benchmark interest rates are used in many financial instruments, such as mortgages and loans, so the manipulation of a benchmark interest rate negatively affects a large proportion of the population. The use of competition law would increase deterrence for this financial crime by providing a wider range of enforcement tools to regulators. This article recommends that competition law should be used by regulators, either on its own or in conjunction with financial regulation, to enforce future incidents of benchmark interest rate manipulation. The article argues that the use of competition law to enforce this financial crime will increase the deterrent effect of sanctions due to the wide range of significant enforcement options available to regulators when a breach of competition law is established.