Geithner Made Recommendations on Libor in 2008, Documents Show

By , Published: July 12

Washington Post

While president of the Federal Reserve Bank of New York, Timothy F. Geithner pressed British regulators to reform the way a critical global benchmark called the London interbank offered rate, or Libor, is calculated, according to a June 1, 2008, e-mail obtained by The Washington Post.

Writing to the head of the Bank of England, among others, Geithner made six recommendations, which included eliminating incentives that could encourage banks to manipulate the rate and establishing a “credible reporting procedure.”

“We would welcome a chance to discuss these and would be grateful if you would give us some sense of what changes are possible,” Geithner wrote.

It’s unclear what other steps Geithner took and whether his efforts stopped any wrongdoing by banks. Last month, London-based Barclays, one of Europe’s largest banks, admitted that it schemed to manipulate Libor during the financial crisis — and its chief executive has asserted that regulators knew about its activities but didn’t do much to stop them. The scandal has led to the resignation of Barclays’s senior executives.

With the Libor scandal threatening to migrate from London to Washington, pressure is growing on regulators and Geithner, who is now the Treasury secretary, to explain what they knew and when.

Read the rest of the article here: Washington Post


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