The watchdog says that the application of the lessons learned from the Libor, Forex and Gold scandals - in which traders were found to have rigged the rate to boost their bonuses and the standing of their bank - had been uneven across the industry and often lacked the urgency required given the severity of past failings.

Tracey McDermott, director of supervision - investment, wholesale and specialists at the FCA, says: “We have seen widespread historic misconduct in relation to benchmarks. It is now critical that firms act to restore trust and confidence in the system. Firms should have in place systems to manage the risks posed by benchmark activities and to address the weaknesses that have previously been identified.

“We recognise that this is a significant task and firms had made some improvements, but the consistency of implementation and speed at which these changes have been taking place is disappointing. Firms should take our findings on board and consider further steps to improve their oversight.”

The FCA found that firms were failing to identify a wide enough scope of benchmark activities by wilfully interpreting definitions laid down by global regulatory body Iosco too narrowly. In addition, some firms had not made sufficient effort to properly identify the conflicts of interest that could arise from their businesses and benchmark activities.

Following the review the FCA has said that firms need to:

• continue to strengthen governance and oversight of benchmark activity;
• continue to identify and manage conflicts of interest;
• fully identify their benchmark activities across all business areas;
• establish oversight and controls for any in-house benchmarks where they have not done so; and
• implement appropriate training programmes.