EU plan to put market riggers behind bars

London - Traders in the European Union caught rigging market benchmarks like Libor, oil or currencies could be jailed for four years under a deal agreed on Friday.

The agreement on toughening up the bloc's law on stopping market abuse was reached between representatives of the European Parliament and the bloc's member states, parliament said in a statement.

It follows public anger after U.S. and European authorities fined 10 banks and brokerages around $6 billion in connection with rigging the London Interbank Offered Rate or Libor.

The revised law, which still needs to be formally approved by parliament and EU states, will take effect from 2016.

"The Libor scandal was market manipulation of the worst kind. We are seeing more alleged and potential manipulation of benchmarks in energy markets such as oil and gas and foreign exchange markets," said Arlene McCarthy, a British centre-left EU lawmaker who helped to negotiate the deal.

Member states will also be required to impose criminal sanctions for inciting market abuse, and aiding and abetting market abuse as well as direct attempts to commit such offences.

Banks and other financial institutions will also be criminally liable for market abuses rather than just individuals.

It is the first time that the EU has used new powers under its Lisbon Treaty to enforce the bloc's rules using minimum levels of criminal sanctions.