With the scandal over alleged manipulation of a critical global interest rate threatening to migrate from London to Washington, pressure is growing on one former banking regulator to explain what he knew and when: Treasury Secretary Timothy F. Geithner.
In an effort to address some of these questions, the Federal Reserve Bank of New York, which Geithner led from 2003 until he joined the Obama administration, is set to release documents Friday morning detailing its response to concerns raised as early as 2007 about Libor, a series of rates that help set the standard for $10 trillion worth of corporate bonds, credit cards, mortgages and other loans around the world.
Documents obtained by The Washington Post show Geithner, in an e-mail dated June 1, 2008, making six recommendations to the head of the Bank of England to reform the London interbank offered rate, known as Libor. He advised his British counterparts to eliminate incentives that could encourage banks to manipulate the rate and to establish a “credible reporting procedure.”
“We would welcome a chance to discuss these and would be grateful if you would give us some sense of what changes are possible,” Geithner wrote.
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