The European Union says manipulating a benchmark interest rate in London should be a criminal offense.

The EU called on its 27 member states Wednesday to set criminal penalties for rigging interest rates to affect the LIBOR (the London Interbank Offered Rate), a key rate that is used worldwide to set borrowing costs on trillions of dollars of contracts, loans and mortgages held by businesses and consumers. The EU did not say what the penalties should be, leaving that up to individual countries.

The EU acted in the wake of the recent admission by Britain's Barclays bank that it attempted to manipulate the rate between 2005 and 2009. Barclays was fined $453 million by British and American regulators after admitting it submitted false information on its borrowing costs in an effort to keep the benchmark rate low.

Investigators are also looking at the actions of several other banks, including Citigroup and JPMorgan Chase in the United States, in connection with the interest-rate rigging.