Rate-Fixing Scandal Hits U.S.: Fed Drops LIBOR Bombshells
According to newly released documents, Tim Geithner and other U.S. authorities were aware of international rate-fixing as early as 2007
During that period, internal emails, phone transcripts, and presentation slides—some shared with Barclays Bank itself—all provided American authorities with convincing evidence that the crucial numbers were being manipulated. As suspicion grew in early 2008, the concerns made it to the desk of Tim Geithner, then president of the New York Fed,
On September 3, as credit dried up amid the financial crisis, a Barclays employee emailed the New York Fed complaining that “Libors continue to be set too low.”
Within months, American financial regulators were regularly discussing unusual LIBOR rates with their British counterparts—and with Barclays itself. In early 2008, Geithner discussed the issue personally with Bank of England governor Mervyn King in Basel, Switzerland,
Experts have argued that Geithner would have had more than enough power to curb the manipulation, or to refer it to the Justice Department and Commodity Futures Trading Commission.