Tags: Geithner | Senate | Libor | 2008

Geithner Tells Senate He Was Concerned About Libor in 2008

Thursday, 26 July 2012 02:13 PM

U.S. Treasury Secretary Timothy Geithner said he was concerned when he heard about potential weaknesses in the London interbank offered rate in 2008 and reiterated that he moved quickly to alert U.S. and British regulators.

“I absolutely thought this was a problem,” Geithner told the Senate Banking Committee. Geithner, who was president of the Federal Reserve Bank of New York at the time, said he discussed Libor with officials at the Treasury Department, Securities and Exchange Commission and the Commodity Futures Trading Commission.

Confidence in Libor, a benchmark for securities worldwide, was hurt by Barclays Plc’s admission that it submitted false rates. A probe by U.K. and U.S. authorities cost the London-based bank a record 290 million-pound ($449 million) fine and led to the ouster of Chief Executive Officer Robert Diamond.

Senator Richard Shelby of Alabama, the top Republican on the banking committee, said in a statement that news reports on Geithner’s handling of concerns about Libor manipulation “suggest that he, too, may have tempered his response to what can be characterized as a significant problem within the banking industry.”

The Libor issue is about fraud, said committee Chairman Tim Johnson, a South Dakota Democrat.

“There are some who seek to put the entire blame on the cops instead,” Johnson said in a statement. “But it would be a mistake to shift the focus away from the continued effort to hold the companies and individuals who committed fraud accountable.”

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Thursday, 26 July 2012 02:13 PM
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