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."
It recommended the British Bankers' Association require that auditors for banks reporting their borrowing costs for the calculation of Libor attest to the accuracy of their rates.
London-based Barclays (BARC.L) is the only bank so far to admit any wrongdoing in giving false information as part of the complex process of setting Libor, in order to influence the pricing of derivatives and also to rebut speculation about the weakness of its balance sheet during the financial crisis.
Read more: http://www.reuters.com/article/2012/07/13/us-banking-libor-geithner-idUSBRE86C08G20120713
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