U.S. Treasury Secretary Timothy Geithner appeared before Congress on Wednesday to answer questions surrounding his initial response to the rigging of the international interest rate, Libor. The banking giant Barclays was fined $453 million last month for manipulating Libor, which provides the basis for rates on trillions of dollars in transactions across the globe. Recent documents and testimony have fueled accusations Geithner failed to adequately share his knowledge of Barclays’ actions with federal regulators when he headed the New York Federal Reserve four years ago. In his testimony, Geithner insisted he acted responsibly.
Timothy Geithner: "I felt that we did the important and fully appropriate thing, which is to bring the attention not just to the people in Washington that matter but to the British of the — not just the reports and the concerns that were broadly available in the market, in the public domain, but also of the range of problems in the way this rate was designed that created that vulnerability. And so, we gave — we brought those 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 has come under criticism because federal regulators received little cooperation from the New York Fed in building their case against Barclays, despite the Fed’s knowledge of Barclays’ actions. Testifying before a British inquiry last week, Bank of England governor Mervyn King said: "At no stage did [Geithner] or anyone else at the New York Fed raise any concerns with the Bank that they had seen any wrongdoing."