Geithner Pressed British Regulators in 2008 on Libor

Source: Reuters

Geithner pressed British regulators in 2008 on Libor

Fri Jul 13, 2012 2:22am EDT

By Timothy Ahmann

WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner pressed the Bank of England in June 2008 to make changes in the way that Libor, a key interest rate benchmark, was set, according to documents obtained by Reuters.

Geithner, who was the head of the New York Federal Reserve Bank at the time, sent a private email to BoE Governor Mervyn King recommending six ways to enhance the credibility of the London interbank offered rate.

More than a dozen banks are under investigation by authorities in Europe, Japan and the United States over suspected rigging of the global borrowing cost benchmark, which is used in contracts worth trillions of dollars globally.

The June 1, 2008, email, first reported by the Washington Post, included a two-page memo dated May 27 of that year that suggested establishing best practices for calculating Libor, "including procedures designed to prevent accidental or deliberate misreporting."

Read more: http://www.reuters.com/article/idUSBRE86C08G20120713?irpc=932

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4 replies	Author	Time	Post
Geithner Pressed British Regulators in 2008 on Libor (Original post)	Hissyspit	Jul 2012	OP
So he at least suspected rigging in 2008.	snot	Jul 2012	#1
So yesterday was Bernanke, right? and today Geithner, or is this a repeat.	Lionessa	Jul 2012	#2
Because he didn't want to stop the corruption, merely turn it in a direction that benefitted him.	Nihil	Jul 2012	#3
Looks like this was brought to the attn of the NY Fed in 2007:	leveymg	Jul 2012	#4

Response to Hissyspit (Original post)

Fri Jul 13, 2012, 02:34 AM

snot (8,177 posts)

1. So he at least suspected rigging in 2008.

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Response to Hissyspit (Original post)

Fri Jul 13, 2012, 02:41 AM

Lionessa (3,894 posts)

2. So yesterday was Bernanke, right? and today Geithner, or is this a repeat.

Either way, why did he "press" them instead of exposing and charging or whatever we do in cross country financial issues regarding criminal fraud? Involve Congress? I don't know, but he clearly did nothing.

It's like so many of the "punishments" the banks are getting, just kind of lame response to serious problems, and potential criminality.

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Response to Lionessa (Reply #2)

Fri Jul 13, 2012, 08:54 AM

Nihil (11,279 posts)

3. Because he didn't want to stop the corruption, merely turn it in a direction that benefitted him.

He did nothing to risk bringing down the house of cards but did plenty with
old Mervyn to ensure that they continued to profit from the situation.

Bernanke = Geithner = King = every other scumbag who play musical chairs
with such high-value posts.

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Response to Hissyspit (Original post)

Fri Jul 13, 2012, 04:10 PM

leveymg (26,790 posts)

4. Looks like this was brought to the attn of the NY Fed in 2007:

New York Fed Says It Knew Barclays Was Underreporting Libor
Caroline Salas Gage, ©2012 Bloomberg News
Published 08:57 a.m., Friday, July 13, 2012

July 13 (Bloomberg) -- The Federal Reserve Bank of New York said it became aware that Barclays Plc was underreporting borrowing costs for the London interbank offered rate as early as 2007.

A Barclays employee explained to a New York Fed staffer in April 2008 that “Barclays was underreporting its rate to avoid the stigma associated with being an outlier with respect to its LIBOR submissions, relative to other participating banks,” the New York Fed said in a statement posted today on its website.

“The Barclays employee also stated that in his opinion other participating banks were also under-reporting their LIBOR submissions.”

http://www.sfgate.com/business/bloomberg/article/New-York-Fed-Says-It-Knew-Barclays-Was-3705086.php

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Geithner Pressed British Regulators in 2008 on Libor

1. So he at least suspected rigging in 2008.

2. So yesterday was Bernanke, right? and today Geithner, or is this a repeat.

3. Because he didn't want to *stop* the corruption, merely turn it in a direction that benefitted him.

4. Looks like this was brought to the attn of the NY Fed in 2007:

3. Because he didn't want to stop the corruption, merely turn it in a direction that benefitted him.