Economic and monetary affairs committee chair Sharon Bowles says the UK should escape Libor regulation by the European Union.
An EU draft proposal on benchmarks, published last year, suggested the European Securities and Markets Authority would regulate Libor from Paris.
Conservative MPs blasted the EU “power grab” on financial services regulation, particularly after the FCA has only started to regulate Libor from April.
Libor has been in the spotlight since it emerged a number of high profile banks including Barclays and Royal Bank of Scotland were rigging rates.
The Council of Ministers is expected to start looking at EU benchmark rules in early February but the European Parliament is agreeing to limit its scope.
Bowles expects Esma will act as an over-arching supervisor, closely regulating cross-border benchmarks such as Euribor but leaving established activities such as Libor.
Speaking to Money Marketing, she says: “If the majority of contributions are coming from the member state of the administrator and there is pre-existing compliance legislation then it makes sense to leave it there.
“Esma delegates it back to the member state and if there is concern there is a lack of capacity Esma can call it up. The FCA would carry on doing it.”
Last week the European Court of Justice dismissed a UK appeal that short selling should not be regulated by Esma.