Timmy G on the LIBOR mess: Blame the Brits

(Bloomberg) U.S. Treasury Secretary Timothy F. Geithner said it was the responsibility of U.K. regulators to address possible manipulation of the London interbank offered rate after he told them of his concerns when he was president of the Federal Reserve Bank of New York in 2008.

“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 told the House Financial Services Committee today.

Confidence in Libor, a benchmark for financial products worldwide, has been shaken by Barclays Plc’s acknowledgment that it submitted false rates. Robert Diamond, who resigned as London-based Barclays’s chief executive officer after the bank was fined 290 million pounds ($451 million), has told British lawmakers that other banks also made false Libor submissions.

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“We were aware of the risk that the way this was designed created not just the incentives for banks to underreport but gave them the opportunity to underreport and that was a problem,” Geithner said. ................(more)

The complete piece is at: http://www.bloomberg.com/news/2012-07-25/geithner-says-u-k-regulators-had-libor-responsibility.html