Geithner warned UK authorities over Libor scandal in 2008

  • U.S. Treasury Secretary Timothy Geithner has said that he had warned UK authorities about problems with the Libor inter-bank lending rate in 2008.

    He told U.S. politicians he had emailed the Bank of England with suggestions on how to resolve the issues.

    The process banks use to set the benchmark rate at which they lend to each other has come under intense scrutiny following an investigation into Barclays that led to a $450 million fine.

    There is widespread belief that other banks were also involved in manipulating the rate, which is also used as the basis for pricing a range of loans and investments.

    In a testimony to the U.S. House of Representatives, Geithner, who was head of the New York Federal Reserve Bank at the time, said the British Bankers’ Association, which is a private body, was not able enough to monitor the setting of Libor.

    Governor of the Bank of England Sir Mervyn King recently proposed that central bank governors and regulators meet to discuss possible reform of Libor.

    Geithner had previously said that reforming Libor must be an international effort.