AMERICAN authorities did all they could to warn British regulators over flaws in the Libor system, as far back as 2008, the defiant US Treasury secretary Timothy Geithner told politicians in Washington DC yesterday.
Geithner faced a grilling in front of the House financial services committee, yet insisted that US regulators warned the Bank of England about Libor manipulation, and said that the failures of governance occurred on this side of the pond.
“I personally raised this with the governor of the Bank of England, and I sent him a very detailed memorandum recommending a series of changes,” Geithner said, adding that the British Bankers’ Association (BBA) was incapable of policing the London inter-bank offered rate, known as Libor.
“We brought [our] concerns to their attention. And we felt – and I still believe this – that it was really going to be on them to take responsibility for fixing this.”
Geithner was responding to charges that his response to the apparent manipulation of Libor had been inadequate. “It appears that you treated it as almost a curiosity or something akin to jay-walking instead of highway robbery,” said Congressman Jeb Hensarling.
“If this is the crime of the century, as so many people are reporting today, never once did you come [here] and mention it as being a problem,” fellow congressman Scott Garrett added.