The European Commission is going to suggest stripping London of its control over the scandal-hit Libor lending rate and hand over supervision to the Paris-based European Securities and Markets Authority (ESMA), the Financial Times said. Citing a draft copy of the European Commission's proposal, the financial daily said that countries running Libor, Euribor or other "critical union benchmarks" would be under the direct supervision of ESMA. However, most indices' administrators would be run by their home country. The regulation is due to be published this summer, though it may not be passed into law before next year's European parliamentary elections, the FT said. Sixteen global banks set Libor, the interbank lending rate, by giving daily estimates of how much it would cost them to borrow funds from other banks for varied periods of time. Most of these banks are under investigation by authorities in Europe, Japan and the United States, suspected of rigging the rate between 2007 and 2010.
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