Geithner in the hot seat

N.Y. Fed quiet on Barclays’ admission of rigging Libor

By Jia Lynn Yang and Danielle Douglas, WashPost, Published: July 24

Treasury Secretary Timothy F. Geithner has said that he sounded the alarm four years ago to regulators about problems with the benchmark interest rate known as Libor.

But Geithner, who was then head of the Federal Reserve Bank of New York, did not communicate in key meetings with top regulators that British bank Barclays had admitted to Fed staffers that it was rigging Libor, according to people familiar with the matter.

Instead, regulators at the Commodity Futures Trading Commission and the Justice Department worked largely without the Fed’s help to build a case against Barclays. That work has culminated in a massive scandal rocking the banking industry on both sides of the Atlantic.

As Geithner prepares to testify Wednesday morning on Capitol Hill, he returns to a familiar position as a lightning rod for critics on the left and the right who find fault in his work as a banking regulator before he joined the White House and as a bailout architect under President Obama.

(More here.)