Reuters reports EU lawmakers have backed new rules to stop bankers rigging financial market benchmarks.  In an effort to boost confidence in the financial market benchmarks, under these rules regulators will directly supervise these benchmarks.

In theory, financial regulatory supervision is a good idea.  In reality, by itself it is not.

As discussed in Transparency Games, the Federal Reserve knew the banks were rigging the Libor interest rates.  Yet, the Federal Reserve found some reason to sit on its hands for four years and watch the bankers continue to rig the benchmark for their benefit.

What is to stop this from happening again?

This is where the Transparency Label Initiative™ comes in.  The Initiative only puts its label on financial market benchmarks that provide the necessary disclosure so market participants can know on an ongoing basis the benchmarks have not been manipulated.

To date, Libor interest rates do not meet this disclosure standard.