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Secretary Geithner facing questions of LIBOR

U.S. Secretary of the Treasury Timothy Geithner arrives at a meeting of the Financial Stability Oversight Council (FSOC) July 18, 2012 at the Treasury Department in Washington, D.C.

Stacey Vanek Smith: Today European lawmakers have proposed making interest rate rigging a crime. That's in reaction to the LIBOR benchmark interest rate scandal. LIBOR rigging will also be a topic of discussion for U.S. Treasury Secretary Tim Geithner when he goes before Congress a bit later this morning.

Nancy Marshall-Genzer has that story.


Nancy Marshall Genzer: Secretary Geithner is expected to tell the committee that the U.S. economy is starting to regain its footing, but still faces threats from uncertainty about government spending and taxes, and instability in Europe.

Then Geithner will face questions on another European problem: British banks' manipulation of the LIBOR interest rate at the height of the financial crisis. LIBOR is used to set rates for mortgages, student loans and car loans around the world. At the time, Geithner was head of the New York Fed.

Banking consultant Bert Ely.

Bert Ely: The real question here is were the regulators both in the United States and in Great Britain aggressive enough in trying to get to the root of the manipulation and eradicate it.

The Washington Post is reporting that Geithner didn't inform top U.S. regulators that a British Bank had told the New York Fed it was rigging LIBOR. The Geithner grilling will continue tomorrow, when he testifies before the Senate Banking Committee.

In Washington, I'm Nancy Marshall-Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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