Michel Barnier, the European commissioner in charge of financial regulation, is expected to bring forward changes to his market abuse directive and regulation within in the next weeks, the Financial Times said on Monday.
In response to the Libor rigging scandal, Barnier will amend reforms to European Union market abuse rules so that potential "loopholes" are closed and criminal sanctions specifically cover tampering with indices such as Libor and Euribor, the newspaper said.
He is cited as calling the falsification of such benchmark rates a "betrayal" with potentially "systemic consequences".
Libor, the London interbank offered rate, is the benchmark interest rate that underpins trillions of loans, credit cards, mortgages and derivatives around the world. Euribor is the Euro interbank offered rate.
Barnier is expected to work with the European Parliament to add amendments to the market abuse rules he already proposed last year.
Amendments would still have to be approved by EU governments and the parliament, which could take up to a year.
A review of market indices to see whether they should be brought under the watch of regulators is also due to be carried out by Barnier's staff. This review could take several months, the FT said.
"I have never believed in self-regulation for a public good. I believe that we need to make sure there is more transparency in this process," he is quoted as saying.
Barnier's intervention follows the forced resignation of Bob Diamond from Barclays, who said the bank was encouraged by the Bank of England to engage in the practice.
On Monday, Paul Tucker, deputy governor of the BoE, will appear before a panel of lawmakers asking key people what they knew about Barclays and other banks submitting inaccurate figures for Libor.
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