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Regulators Acted Early and Forcefully on Rate-Fixing: Geithner

Regulators acted forcefully and early on allegations banks were fixing the Libor interest rate, Treasury Secretary Timothy Geithner saidat the second annual CNBC and Institutional Investor's "Delivering Alpha" conference in New York on Tuesday.

Tim Geithner speaking at Delivering Alpha
CNBC
Tim Geithner speaking at Delivering Alpha

Geithner was responding to allegationsthat the New York Federal Reserve may have known as early as August 2007 that setting the global benchmark London Interbank Offered Rate was flawed.

“We acted very early in response to concerns that the processes to set this rate were impaired and flawed and vulnerable to misrepresentation,” Geithner said.

“I took the initiative to brief the entire U.S. regulatory community on this at a very early stage,” he added. (Related: Libor Criminal Investigations Will Happen).

Geithner also said they brought it to the attention of the British and “took the exceptional step of writing them a detailed set of recommendations that revealed the extensive set of concerns.”

“We did the right and necessary thing and we did it early,” Geithner stated.

While Geithner said the initial reforms were modest and have not fixed the problems at the center of the rate-fixing scandal, “we have now taken the initiative involving all the countries in the world that have a stake in this to make sure we push for reforms that actually fix the underlying problem.”

Geithner added, “We’re going to make sure there’s a strong and credible response to follow.”

Delivering Alpha

Delivering Alpha 2012 Video

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Delivering Alpha 2012 Advisory Board

  • Afsaneh Mashayekhi Beschloss, President and CEO, The Rock Greek Group

    After a long and successful career on Wall Street, Schloss now works for New York City, where he is deputy comptroller for asset management and chief investment officer for the New York City Retirement System.

  • Ashbel Williams, Executive Director and Chief Investment Officer, Florida State Board of Administration (SBA)

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  • Jennifer Vaccaro, Director of Institutional Sales, Investec Asset Management

    Vaccaro is director of institutional sales at Investec Asset Management, overseeing new business development in the North America institutional market. She has held senior sales positions at several other firms.