U.S. Treasury Secretary Timothy Geithner, under pressure for not doing enough to stop fraudulent manipulation of a key benchmark interest rate, told lawmakers on Wednesday he alerted the appropriate authorities "early on."
In his first chance to defend his actions on the widening Libor scandal before Congress, Geithner said he became aware of the problem in 2008, when he was president of the New York Federal Reserve Bank, an influential bank regulator.
Documents released by the Fed bank show that, as early as August 2007, Barclays told Fed analysts about possible problems with low levels of Libor.
"We, at least I, first learned about those concerns in the early parts of spring of 2008 and we acted very quickly at that stage. At that time, this is in the spring of 2008, we took a very careful look at these concerns, we thought those concerns were justified," Geithner said.
"And we took the initiative to bring those concerns to the attention of the broader U.S. regulatory community, including all the agencies that have responsibility for market manipulation and abuse," he said, citing a specific meeting of the president's working group on financial markets.
That group includes the Commodity Futures Trading Commission, the Securities and Exchange Commission and the Treasury Secretary himself.
Lawmakers were not buying it, noting that the Fed itself continued to use Libor as a benchmark in its emergency lending programs, including the controversial bailout of AIG.
Congressman Scott Garrett asked Geithner why his response in the face of alleged fraud had been so muted.
Read more: http://www.reuters.com/article/2012/07/25/us-usa-geithner-idUSBRE86O0VC20120725
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