Geithner 'gave warning' about Libor rate in 2008

US Treasury Secretary Timothy Geithner warned about the manipulation of Britain's Libor bank rate in 2008, four years before Barclays was fined for trying to rig it, the Washington Post reported. On Thursday the Post cited an email from Geithner sent on June 1, 2008 expressing concern about the Libor interbank lending rate, a reference point for a range of worldwide consumer rates, from credit cards to mortgages. Writing to the Bank of England, Geithner -- then president of the powerful Federal Reserve Bank of New York -- recommended eliminating incentives for bad behavior and establishing a "credible reporting procedure," the Post said. It is unclear what further steps Geithner took, and US regulators were soon embroiled in the 2008 financial crisis following the collapse of investment bank Bear Stearns, which nearly caused another Great Depression. Last month, Barclays was fined $451 million by British and US regulators for the attempted rigging of the Libor and its eurozone equivalent, Euribor, in a scandal that may trigger criminal prosecutions and implicate other banks. US lawmakers plan to question Geithner and Federal Reserve Chairman Ben Bernanke later this month about the British bank-rigging scandal, which threatens to spill over from London to Washington. As well as being the US central bank, the Fed is a watchdog for many of the banks that set the Libor, including Barclays. Questions have been raised about when the Fed detected foul play, whether it did enough to stop it and whether the issue was put on the back burner because Wall Street was in the throes of the financial crisis. The New York Federal Reserve has said that it "received occasional anecdotal reports from Barclays of problems with Libor," in late 2007, in the context of "thousands of calls and e-mails" from market participants. In spring 2008 the Fed said it "made further inquiry of Barclays as to how Libor submissions were being conducted. We subsequently shared analysis and suggestions for reform of Libor with the relevant authorities in the UK." The Post reported that Geithner had a meeting scheduled for April 28, 2008 entitled "Fixing LIBOR," but Bear Stearns had collapsed just weeks earlier.