Tim Geithner in actions implicate him in the Libor-manipulation scandal
July 16.2012
the staff of the Ridgewood blog

Ridgewood NJ, the Washington Post is reporting that during his tenure as president of the New York Federal Reserve Bank Tim Geithner pressed British regulators to reform the way a critical global benchmark called the London interbank offered rate, or LIBOR, is calculated, according to a June 1, 2008, e-mail.

The London Interbank Offered Rate or LIBOR is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. This is the key rate that all other interest rates are based off of.like home mortgages.

If the LIBOR rate was intentional depressed to disguise risk or used to hide the banks true financial situation it could have disguised the risk leading up to the financial crisis in 2008 making it impossible for regulators react.

The Washington Post claims that in an email it obtained Geithner was writing to the head of the Bank of England, among others, making six recommendations, which included eliminating incentives that could encourage banks to manipulate the rate and to establish a “credible reporting procedure.”

The latest development in the Libor-manipulation scandal is that the banks weren’t really fixing the price of the key interest rate in total secret and that US regulators were well aware of these activities at the time, and seemed to have done absolutely nothing.

The Libor-manipulation scandal is now migrating from London to Washington, and pressure is growing on Geithner and other regulators to explain what they knew and when.

Several key Democratic senators have now called on the Justice Department to hold accountable bankers and regulators who failed to “stop wrongdoing that they knew, or should have known about.”

Tim Geithner has already seen term at treasury marred with a failure to pay taxes scandal and has been outspoken critic of free markets blaming Wall Street and capitalism for the financial crisis in 2008 while recent events look to put the blame partial on his shoulders and his in actions in the face of Libor-manipulation by banks.

sourced : http://www.chicagotribune.com/business/breaking/chi-tim-geithner-drawn-into-libor-scandal-20120713,0,6146342.story
sourced : http://www.nypost.com/p/news/opinion/opedcolumnists/what_did_tim_know_NQ113lKVCrJPZHUhVCVVfM

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