|NY Fed Knew about Interest Rate Manipulation in 2007|
|by Tom McGregor||Sun, Jul 15, 2012, 06:45 PM|
On Friday, the Federal Reserve Bank of New York released documents indicating that it discovered five years ago of big banks understating their borrowing costs to manipulate a key interest rate.
According to the Houston Chronicle, “the documents also show Treasury Secretary Timothy Geithner, who was then president of the New York Fed, urged the Bank of England to make the rate-setting process more transparent.”
A congressional panel requested the documents and is investigating manipulation of the London interbank offered rate (LIBOR) rate, which impacts what people pay for loans.
As reported by the Houston Chronicle, “the process for setting LIBOR has come under scrutiny since Britain’s Barclays bank admitted two weeks ago that it had submitted false information to keep the rate low. In settlements with U.S. and British regulators, the bank agreed to pay a $453 million fine.”
Major U.S. banks including Citigroup Inc. and JPMorgan Chase & Co. are under investigation for engaging in similar unethical banking practices.
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