US policymakers face Senate committee over Libor scandal

Elizabeth Fournier
US LAWMAKERS said yesterday they would call Fed chairman Ben Bernanke and the Treasury secretary Tim Geithner to face questions over the Libor scandal.

Tim Johnson, chairman of the US Senate Banking Committee, said: “I am concerned by the growing allegations of potential widespread manipulation of Libor and similar interbank rates by some financial firms,” he said.

“The Banking Committee will hold hearings in July with Treasury Secretary Geithner and Federal Reserve chairman Bernanke, and I am asking them to be prepared to answer Senators’ questions on this matter,” he added.

It also emerged yesterday that the Federal Reserve Bank of New York may have known in August 2007 that the setting of global interbank rates was flawed. A spokesman said it had “anecdotal reports from Barclays of problems with Libor” and worked with the UK regulators on the issue.

Marcus Agius
“I was faced with the dilemma that there was far greater reputational damage than anticipated, and certainly far greater than we had sought, that there was a requirement for some further action.”

“[Diamond] was utterly depressed. The conversation was not long. He asked for time to talk to his family and we left confident that if he hadn’t already made the decision, that he would make the right decision.”

David Ruffley
Ruffley: “Under your captaincy a great British bank has been dragged through the mud. Are you ashamed of that?”

Agius: “I regret deeply what’s happened.”

Andy Love
“Don’t you accept that the bank was totally out of touch, that it took a meeting with the governor of the Bank to do the right thing?”