The financial system is still broken, but the nomination of budget wonk Lew is a sure sign the White House has other priorities
The nomination of budget wonk Jack Lew for Treasury Secretary is a sure sign that, in the eyes of the White House, the financial crisis has ended.
That’s kind of sad, actually. And it puts financial reform activists in an odd position: Tim Geithner, their bête noire, their oft-disparaged adversary, won’t be there to kick around any more – and they might have wished that he would be. As pugilistic as Geithner could get with those who criticized his efforts at bailouts and financial reform, at least he was listening. With his departure, financial reform will largely be pushed aside.
It’s clear the White House is moving on, that financial reform is no longer a priority – and yet the financial system is really no more secure than it was when Tim Geithner took over in the dark days of 2009. It’s not flailing and gasping for air, but that doesn’t mean it’s suddenly safe.
In the immortal words of Chicago mayor Rahm Emanuel, “You should never waste a good crisis.” Unfortunately, it looks like America did.
A lot of the impetus towards financial reform and oversight have been replaced with the “who’s sitting in the lunchroom next to whom” analysis of politics. The conflicts of Occupy Wall Street and the warning tomes published by former government officials like Sheila Bair and Neil Barofsky will go unheeded. The nation spent at least four months held hostage to ad nauseum analyses of the congressionally manufactured fiscal cliff crisis, and soon by the congressionally manufactured debt-ceiling crisis. The financial world has lost the spotlight. Aren’t the banks shrinking? Are they profitable? No matter, the moment has passed.
President Obama’s speech on Thursday seemed to put a neat bow on the past four years. On the near-failure of the financial system, he said: “We put in place rules to make sure it would never happen again;” on the possibility that another bank might fail, “we made sure taxpayers would not be on the hook.”
Obama’s remarks were so prettily made that one almost hesitates to point out that we didn’t actually do those things. Financial reform, in the form of the Dodd-Frank act, does nothing to prevent another crisis. There is no law that prevents banks from making stupid loans or taking outsize risks with taxpayer money.If another big bank stumbles and threatens the economy, it’s hard to picture Uncle Sam backing away with no taxpayer involvement.
Numerous “flash crashes” show that the infrastructure of the stock market is weak and needs regulatory attention. The one part of Dodd-Frank that is supposed to prevent banks from gambling is known as the Volcker Rule. There is apparently a doorstopper-sized draft of it somewhere, but for regulatory purposes it does not yet exist.
The era of Tim Geithner at Treasury, as tumultuous as it was, was a useful one. Geithner, a former head of the New York Federal Reserve, built an often shaky rope bridge between Wall Street and Washington. We got some legislation out of it, however flawed. Regular people became familiar with mortgage-backed securities and the sometimes crazy risks taken by Wall Street. This was Geithner’s world; his knowledge resided in the economy and the markets, the fast, pragmatic world of fast-moving money and snap decision-making, where it’s rare to predict what will happen in the next quarter.
Lew worked briefly on Wall Street, but he is unlikely to do favors for Wall Street. He’s much more likely to entirely forget about Wall Street. It was clear from today’s press conference that the financial markets are not a priority for Lew or the president.
That already worries some activists. Dennis Kelleher, the CEO of Better Markets, said today about Lew: “The one area of concern is whether or not he is sufficiently committed to quickly and thoroughly implementing financial reform and re-regulating Wall Street … This concern arises from Mr Lew’s past statements suggesting a lack of knowledge about the financial crisis and its causes. He has appeared to minimize the undeniably critical role deregulation played in causing and accelerating the financial and economic crises.”
Lew never speaks about himself, and you don’t have to be to a graphologist to tell that his loopy, unintelligible signature indicates that he does not want to be known. Geithner, on the other hand, once gave an interview to Vogue that included references to him surfing and cooking barefoot.
Geithner was willing to make deals, to bend over backwards in some cases. He never seemed to think he had as much power as he really did. As Vogue tells one revealing anecdote that shows how Geithner never really thought he could throw his weight around: “On a recent business trip, Geithner and his entourage were trying to decide where to eat dinner. An aide suggested a popular restaurant, but Geithner nixed the idea, saying they’d never get a table. The aide laughs at the memory: ‘I mean, he’s the secretary of the Treasury! He could get a table.’”
Lew was clearly happy to get the treasury nomination. Geithner fought it, then spent four grudging years in treasury, two of them openly trying to escape the institution. If there was one movie moment that could describe the four-year career of Timothy Geithner as treasury secretary, it would be this despairing exclamation from The Godfather, Part III: “Just when I thought I was out, they keep pulling me back in!”
Geithner was an odd fit for Treasury, a fact Obama noted: “I couldn’t blame Tim when he told me he wasn’t the right guy for the job.” A Spock-like economic wonk used to the civilized stone halls of the New York Federal Reserve bank, Geithner was dragged in 2009 into one of the most ill-starred tenures of any modern US treasury Secretary. From the financial crisis, to Tarp, to AIG, to not one but two immature congressional fights over lifting the US debt ceiling, he lived the exasperated query from Dorothy Parker: “What fresh hell is this?”
The White House kept thwarting him, but finally gave in. “I understand that Tim is ready for a break,” President Obama said, in one of the great political understatements of our time. By August of 2009 – less than a year in the job – Geithner was caught in a screaming, profanity-laden rant in a meeting with Federal Reserve chairman Ben Bernanke and other regulators. He made quick enemies of Tarp inspector Neil Barofsky and Federal Deposit Insurance Corporation chair Sheila Bair, both of whom wrote books casting Geithner in a bad light.
Part of Geithner’s problem in Washington is that it was easy to tell which button to push to drive him crazy: his legacy. The suggestion that he is cozy with Wall Street that seems to drive Geithner over the edge, even now. In an appearance on Charlie Rose’s television show, Geithner responded to the charges that he is too cozy with Wall Street by saying, “You know, I’m deeply offended by that,” Geithner said. “I find that deeply offensive.” Bair dubbed him the “bailouter in chief.”
Barofsky, who openly suggested Geithner was trying to thwart his oversight of Tarp, chronicled a Geithner rant: ‘No one has ever made the banks disclose the type of shit that I made them disclose after the stress tests. No one! And now you’re saying that I haven’t been fucking transparent?’ … Neil, I have been the most fucking transparent secretary of the treasury in this country’s entire fucking history!” According to Barofsky, a press aide later whispered that he expected Geithner to throw a punch.
It’s tempting for anyone – not just Geithner and Barofsky – to say “goodbye to all that.” No one likes to be in a constant crisis mindset; it is the opposite of a civilized society if we are. But that crisis mindset could have been useful, if it had pushed financial reform a little harder. Geithner, to some extent, was willing to take the punches necessary to connect Washington and Wall Street.
That connection is essential. Jack Lew, because of his love of budgets and deficit planning, seems likely to let that tenuously built bridge between Wall Street and Washington decay. His strengths are in the molasses-speed world of government deficits and budget planning, where costs are calculated in increments of a year or a decade. He is largely uninterested in Wall Street, and unbendable in some cases.
Congressional Republicans have derided Lew as “an uncompromising know-it-all,” in the words of a newspaper profile on him last month. Whereas Geithner spoke the language of Wall Street – including its tone, with yelling and profanity – Lew speaks the language of the political court. He reportedly yelled once, chastely, about Medicaid – and then felt immediately embarrassed after.
To the administration, Lew’s storied history in budgets is only a plus. As President Obama nominated him, he made sure to mention that Lew had presided over three budget surpluses. And Lew played to his real audience, giving a shoutout to the staff of the Office of Management and Budget: “I am delighted to see so many of my friends from OMB here today.” In 1999, he romanticized budgets: “Budgets aren’t books of numbers. They’re a tapestry, the fabric of what we believe. The numbers tell a story, a self-portrait of what we are as a country.”
That is beautifully said, and also true. But inevitably, this means when the next financial crisis comes – and it will, because it always does – everyone will ask something along the lines of “why wasn’t anyone paying attention?”
Here’s the answer: because we did once, and then got bored before we finished the job.
The president’s hopes of an easy nomination process have been dashed by senators vowing to block Jack Lew’s appointment
Barack Obama urged the US Senate to quickly confirm Jack Lew as the new US treasury secretary on Thursday, describing him as a man capable of forging bipartisan compromises.
But the overture was immediately rebuffed by Jeff Sessions, the most senior Republican on the Senate budget committee, who accused Lew of being dishonest and promised an “aggressive” campaign against his nomination.
Sessions appeared to dash hopes of an easy nomination process. “Jack Lew must never be secretary of treasury,” he said. Sessions said comments made by Lew two years ago, when he claimed that Obama’s budget plans would steer the US to a position where “we’re not adding to the debt any more”, were “outrageous and false”.
Lew had been widely expected to sail through the nominating process but the Sessions warning reflects the deeply polarised nature of Washington, especially over budget and tax issues. Obama formally announced at a press conference at the White House that Lew, his chief of staff, would be his nominee to replace Tim Geithner. Lew and Geithner flanked the president as he gave a statement praising both men.
Lew, a long-time Democrat, has been involved in budget battles going back to the early 1980s, through the Clinton years and in the Obama administration. In spite of Republicans having frequently emerged bruised from the encounters, describing him as uncompromising, the commonly held view in Washington was that he was well-enough liked to make it through the nomination process unscathed.
Obama, in his statement, anticipated the coming battles with Republicans in Congress, beginning with a showdown over the $16.4tn (£10.2tn) debt ceiling late next month and further battles over deep spending cuts. The president claimed Lew was well qualified for the job of balancing the budget. He said: “Under President Clinton, he presided over three budget surpluses in a row.” In words aimed at Republicans in Congress, he added: “So for all the talk out there about deficit reduction, making sure our books are balanced this is the guy who did it. Three times.”
He described Lew as low-key, more interested in a discussion with other policymakers rather than appearing on television. “Over the years he has built a reputation as a master of policy who can work with members of both parties and forge principled compromises.”
The Republicans want cuts in welfare programmes, but the Obama administration wants to protect key elements, such as healthcare for the elderly, Medicare, and for the poor, Medicaid, and would rather cut defence spending. The Obama administration also wants tax revenue raising measures included in the mix.
With this in mind, Obama said of Lew: “Maybe most importantly, as the son of a Polish immigrant, a man of deep and devout faith, Jack knows that every number on the page, every dollar we budget every decision we make, has to be an expression of who we wish to be as a nation, our values, the values that says everyone gets a fair shot at opportunity and says we expect all of us to fulfil our obligations as citizens in return.”
Obama added: “Jack has my complete trust … So I hope the Senate will confirm him as quickly as possible.”
This completes the top trio of cabinet appointments, Obama having already nominated John Kerry as secretary of state and Chuck Hagel as defence secretary. Obama praised Geithner for helping to restore the economy after its collapse.
The Republicans want Obama to begin cutting federal spending in return for raising the $16.4 trillion borrowing limit, a potential re-run of a standoff that almost saw the federal government close down in 2011. Obama said earlier this month that raising the debt ceiling should be routine for Congress and he will not engage with Congress this time.
As Treasury secretary, Lew’s signature will appear on currency. His series of loops has started speculation over whether he will try for a more readable signature, as did Geithner. Obama joked that if Lew did not make at least one of his loops legible, he wound rescind his nomination.
President Barack Obama is expected to name White House Chief of Staff Jack Lew to replace Timothy Geithner as US treasury secretary, US media report.
See original here: Lew ‘picked to lead US Treasury’
Tim Geithner joins House speaker in taking US economic debate to Sunday morning talk shows as sides struggle for agreement
Republican leader John Boehner said Sunday he was “flabbergasted” by Treasury secretary Tim Geithner plan to save the nation from the fiscal cliff, in the latest show of brinkmanship over a deal to avert the year end budget crises.
His statement came as Washington leaders took to the airwaves amid an escalation in the clash over how to avert the automatic triggering of massive spending cuts and the expiration of across-the-board tax cuts.
Geithner went on a media blitz Sunday to defend president Barack Obama’s position over the fiscal cliff. With less than a month to go, Geithner said he could not promise Congress would find a solution. If the tax rates expire and cuts are imposed as they stand, the Congressional Budget Office calculates the US will be plunged back into recession and unemployment will spike to 9.1%.
“That’s a decision that lies in the hands of the Republicans that are now opposing an increase in tax rates” for the wealthiest Americans, Geithner told Fox News Sunday.
Geithner told CBS’s Face the Nation: “Just remember to extend those tax cuts costs $1tn dollars over 10 years. There is no way we can get back to a balanced plan that put us back on the path to living within our means, protects Medicare, invests in things we need, if you extend those tax cuts.”
Boehner, speaker of the House of Representatives, renewed his stand against increased tax rates for the rich. “Here’s the problem,” Boehner told Fox. “When you go and increase rates, you make it more difficult for our economy to grow.” Boehner said if Republicans agreed to give Obama a proposed $1.6tn in new tax revenue, “He’s going to spend it,” not reduce the deficit.
Last week, Obama said he believed the two sides would reach an agreement before Christmas. “We’re nowhere,” Boehner said Sunday. The president’s advisers have set out a plan that calls for the expiration of tax cuts for those earning over $250,000 as part of a plan to raise $1.6tn more in tax revenues over the next 10 years. In exchange, Obama agreed to $400bn in savings from entitlement programmes over the next 10 years but pushed those talks into next year with no guarantees.
On CBS, Republican senator Lindsey Graham slammed Obama’s plans to tackle the debt crisis by imposing higher taxes on the most wealthy. He said Obama’s plans failed to address entitlement reform – cuts in social security and Medicare benefits. Graham championed a plan first put forward by failed presidential candidate Mitt Romney to cap the size of deductions that the rich can take.
“If you raise tax rates you get $400bn in revenue and you hurt job creation. If you limit reductions to about 50,000 per person, you protect the middle class and you get about $800bn in revenue,” he said. “And 100% of Americans are going to lose everything we know as America if we don’t fix entitlements. We are becoming Greece because of out-of-control entitlements.”
“I think we are going over the cliff. It’s pretty clear to me they have made a political calculation,” said Graham.
Geithner said he still believed a deal was possible and that the “political theatre” could be a sign of progress. “I actually think that we’re gonna get there,” he said on ABC’s This Week. “I think we’re actually making a little bit of progress, but we’re still some distance apart.”
The row comes amid signs that political deadlock is harming the US economy. Business leaders have said they are holding back on hiring as they deal with the uncertainty created by the fiscal cliff. On Friday, the US releases its latest non-farm payroll figures, the key monthly jobs report which may give a fuller picture of the fiscal cliff’s true impact.
European leaders ‘committed to doing what’s necessary’ to hold the eurozone together, says Tim Geithner
US treasury secretary Timothy Geithner has called on European leaders to do more to solve the region’s debt crisis, including lowering interest rates for those countries that are undertaking painful reforms.
Interviewed on Bloomberg TV in Los Angeles on Tuesday, Geithner said the eurozone had to take steps including “bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need.”
Geithner was speaking a day after returning from Germany, where he held meetings with German finance minister Wolfgang Schäuble and with European Central Bank president Mario Draghi.
Draghi last week said that the central bank would do whatever it takes to preserve the euro, stirring speculation it might take more radical steps at a policy meeting on Thursday.
Geithner said Schäuble and Draghi had walked him through the plans that they were putting into place to try and solve the crisis.
“What you know, from what Europe has said, that they are committed to doing what’s necessary to hold the Europe Union together,” said Geithner. “I absolutely believe they have the means to do it.”
Geithner said past financial crisis showed that the longer it took to address the issues, the more they cost.
“I believe they understand that. That’s why they’ve signalled they are prepared to move further. Now again, this is going to take time,” he added.
Geithner also said there was more Congress could do to bolster growth in the United States.
“There’s a lot of things Congress can do, in the near term, not just in the long run, to make growth stronger,” he said.
Geithner said Congress should take advantage of record low borrowing costs to adopt measures to support the economy, which he said was growing at between 1 and 2%.
“We pay about 1.5% for a 10-year Treasury now, to borrow long-term now, because fundamentally people have faith in the ability of the US to solve its problems,” Geithner said.
“It’s sensible for us to take advantage of this moment to do things that will make the economy stronger.”
5 live asked the head of credit at Legal and General if Tim Geithner’s visit to Germany could be seen as significant.
Here is the original post: AUDIO: Can the US help save the eurozone?
Treasury Secretary Timothy Geithner defended his 2008 response to the Libor-fixing scandal that continues to unfold, and stressed that more reforms and enforcement actions are on the way.
Read the original here: Geithner on Libor: U.S. was first to raise red flags
The media’s ‘bad apple’ thesis no longer works. We’re seeing systemic corruption in banking – and systemic collusion
Last fall, I argued that the violent reaction to Occupy and other protests around the world had to do with the 1%ers’ fear of the rank and file exposing massive fraud if they ever managed get their hands on the books. At that time, I had no evidence of this motivation beyond the fact that financial system reform and increased transparency were at the top of many protesters’ list of demands.
But this week presents a sick-making trove of new data that abundantly fills in this hypothesis and confirms this picture. The notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers, but this week’s headlines make such a conclusion, sadly, inevitable.
The New York Times business section on 12 July shows multiple exposes of systemic fraud throughout banks: banks colluding with other banks in manipulation of interest rates, regulators aware of systemic fraud, and key government officials (at least one banker who became the most key government official) aware of it and colluding as well. Fraud in banks has been understood conventionally and, I would say, messaged as a glitch. As in London Mayor Boris Johnson’s full-throated defense of Barclay’s leadership last week, bank fraud is portrayed as a case, when it surfaces, of a few “bad apples” gone astray.
In the New York Times business section, we read that the HSBC banking group is being fined up to $1bn, for not preventing money-laundering (a highly profitable activity not to prevent) between 2004 and 2010 – a six years’ long “oops”. In another article that day, Republican Senator Charles Grassley says of the financial group Peregrine capital: “This is a company that is on top of things.” The article goes onto explain that at Peregrine Financial, “regulators discovered about $215m in customer money was missing.” Its founder now faces criminal charges. Later, the article mentions that this revelation comes a few months after MF Global “lost” more than $1bn in clients’ money.
What is weird is how these reports so consistently describe the activity that led to all this vanishing cash as simple bumbling: “regulators missed the red flag for years.” They note that a Peregrine client alerted the firm’s primary regulator in 2004 and another raised issues with the regulator five years later – yet “signs of trouble seemingly missed for years”, muses the Times headline.
A page later, “Wells Fargo will Settle Mortgage Bias Charges” as that bank agrees to pay $175m in fines resulting from its having – again, very lucratively – charged African-American and Hispanic mortgagees costlier rates on their subprime mortgages than their counterparts who were white and had the same credit scores. Remember, this was a time when “Wall Street firms developed a huge demand for subprime loans that they purchased and bundled into securities for investors, creating financial incentives for lenders to make such loans.” So, Wells Fargo was profiting from overcharging minority clients and profiting from products based on the higher-than-average bad loan rate expected. The piece discreetly ends mentioning that a Bank of America lawsuit of $335m and a Sun Trust mortgage settlement of $21m for having engaged is similar kinds of discrimination.
Are all these examples of oversight failure and banking fraud just big ol’ mistakes? Are the regulators simply distracted?
The top headline of the day’s news sums up why it is not that simple: “Geithner Tried to Curb Bank’s Rate Rigging in 2008″. The story reports that when Timothy Geithner, at the time he ran the Federal Reserve Bank of New York, learned of “problems” with how interest rates were fixed in London, the financial center at the heart of the Libor Barclays scandal. He let “top British authorities” know of the issues and wrote an email to his counterparts suggesting reforms. Were his actions ethical, or prudent? A possible interpretation of Geithner’s action is that he was “covering his ass”, without serious expectation of effecting reform of what he knew to be systemic abuse.
And what, in fact, happened? Barclays kept reporting false rates, seeking to boost its profit. Last month, the bank agreed to pay $450m to US and UK authorities for manipulating the Libor and other key benchmarks, upon which great swaths of the economy depended. This manipulation is alleged in numerous lawsuits to have defrauded thousands of bank clients. So Geithner’s “warnings came too late, and his efforts did not stop the illegal activity”.
And then what happened? Did Geithner, presumably frustrated that his warnings had gone unheeded, call a press conference? No. He stayed silent, as a practice that now looks as if several major banks also perpetrated, continued.
And then what happened? Tim Geithner became Treasury Secretary. At which point, he still did nothing.
It is very hard, looking at the elaborate edifices of fraud that are emerging across the financial system, to ignore the possibility that this kind of silence – “the willingness to not rock the boat” – is simply rewarded by promotion to ever higher positions, ever greater authority. If you learn that rate-rigging and regulatory failures are systemic, but stay quiet, well, perhaps you have shown that you are genuinely reliable and deserve membership of the club.
Whatever motivated Geithner’s silence, or that of the “government official” in the emails to Barclays, this much is obvious: the mainstream media need to drop their narratives of “Gosh, another oversight”. The financial sector’s corruption must be recognized as systemic.
Meanwhile, Britain is sleepwalking in a march toward total email surveillance, even as the US brings forward new proposals to punish whistleblowers by extending the Espionage Act. In an electronic world, evidence of these crimes lasts forever – if people get their hands on the books. In the Libor case, notably, a major crime has not been greeted by much demand at the top for criminal prosecutions. That asymmetry is one of the insurance policies of power. Another is to crack down on citizens’ protest.
Washington politicians considering asking former Barclays chief executive to testify as Libor-fixing controversy crosses to US
US politicians are considering summoning Barclays’ former boss Bob Diamond to Washington to answer questions about the Libor-fixing scandal, in a sign that the controversy is becoming an ever hotter issue in the US.
Two high powered committees, the Senate Banking committee and the House Financial Services committee, are both believed to be considering calling Diamond to testify. The committees declined to comment, but sources close to them said they were in the early stages of gathering information and were almost certain to call the former Barclays chief executive after the summer recess. A spokesman for Bob Diamond declined to comment.
Senator Tim Johnson, chairman of the banking committee, said on Tuesday that his panel would quiz Federal Reserve chairman Ben Bernanke and Treasury secretary Timothy Geithner on the scandal at hearings scheduled before the August break.
“I am concerned by the growing allegations of potential widespread manipulation of Libor and similar interbank rates by some financial firms,” said Johnson.
The US justice department is already investigating the scandal, and several cities and state pension funds have launched legal action, claiming that their investments suffered as a result of the manipulation of Libor rates.
Barclays is the first high-profile settlement with regulators, and last month was fined £290m ($450m) by regulators in the UK and US over allegations that it attempted to manipulated Libor. But more than a dozen other banks including Citigroup, HSBC and JP Morgan Chase are being investigated for their roles in setting Libor rates.
White collar crime expert William Black, professor of economics and law at University of Missouri Kansas City, said US action would soon escalate the scandal. “We have very tough disclosure laws. We already seen how horrific these people’s emails can be, there’s going to be a lot more where that came from,” he said.
In emails already disclosed, Barclays traders referred to Libor “fixings” and appear to have colluded in manipulating the exchange rate. “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger,” wrote one trader after a colleague helped him out.
In the first signs of the reputational fall-out of the crisis, which has left Barclays searching for a new chief executive and chairman, Barclays was dropped from a bond issue for Japan Bank for International Cooperation, because of its involvement in the attempts to fix Libor.
Barclays refused to comment on its role in the bond issue, although City sources noted it had been active in other bond issues in recent days, including for other Japanese issues such as Sumitomo and NTT.
Wayne State University law professor Peter Henning said the scandal had the potential to become “the signature financial fraud of the meltdown.” He said the trigger point was likely to come if and when a US bank is fined.
Henning pointed out that the Justice Department’s fraud division was looking after the case, not the anti-trust division.
“They are looking at this as a fraud case. That’s much more serious for any individual involved. Given the amounts of money we are discussing, there could be serious jail time if anyone is convicted,” he said.
Henning said he expected the scandal to become an increasingly hot political topic. Analysts in the City are attempting to calculate the potential cost of any litigation. Cormac Leech, an analyst at Liberum Capital, calculated that bailed out Lloyds Banking Group could face a bill of £1.5bn – 7% of its stock market value – in the eventual fallout from the affair.
About 45% of US mortgages are tied to Libor rates, and cities including Baltimore are claiming they have had to cut essential services as a result of losing money on investments tied to Libor.
“They are never going to say this, but the Obama administration would like nothing more than to charge a big banker ahead of the election,” said Henning.
John Coffee, a Columbia Law School professor, said the scandal was proving as damaging for regulators as bankers.
The fallout from the scandal is already hitting Obama’s team. Geithner was president of the Federal Reserve bank of New York when the alleged manipulations took place and was aware of some of the issues. Geithner held a meeting on April 28 2008 titled “Fixing Libor” and communicated his concerns to the UK authorities but no further action appears to have been taken.He also regularly spoke to senior figures at Barclays, including Diamond.
“If the Federal Reserve knew that Libor was being manipulated and sat there and tolerated it, it suggests they were more interested in their relationships with the banks than with consumers,” said Coffee.
“When Republicans are being hammered for being too close to big business, what could be better than pointing fingers at Geithner?” said Black.