Fed, Geithner Knew of False Libor in 2008
Posted on Jul 13, 2012
The Federal Reserve and the U.S. government knew back in 2008 that Barclays was filing false reports about Libor, the interest rate that international banks charge one another for short-term loans, according to documents released Friday. The documents show that a staffer at the U.K.-based bank told the New York Federal Reserve—which was then run by current Treasury Secretary Timothy Geithner—more than four years ago about the false reports before the admission was circulated through the federal government.
Barclays has been fined about $450 million for its role in fixing the rate. The Libor (London Interbank Offered Rate) scandal has swept through the banking world, with other institutions, including Citigroup, JPMorgan Chase, the Royal Bank of Scotland and Deutsche Bank, all acknowledging that they are being investigated.
—Posted by Tracy Bloom
The New York Fed released the documents in response to inquiries from members of Congress about the role of Treasury Secretary Timothy Geithner, then the head of the New York Fed, and its questions about Libor.
...Geithner and Fed Chairman Ben Bernanke are expected to be asked about the Libor scandal in upcoming Senate testimony.
A group of a dozen Democratic lawmakers asked the Justice Department to examine whether regulators failed to stop “wrongdoing that they knew, or should have known about.”
Dominic's pics (CC BY 2.0)