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Congress Probing Fed's Role in Libor Scandal

United States Federal Reserve
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United States Federal Reserve

Congressional investigators probing efforts to rig Libor have asked the Federal Reserve to turn over five years of correspondence between the central bank and the U.S. banks that help set the rate.

In a letter addressed to New York Federal Reserve Bank president William Dudley, Rep. Randy Neugebauer (R-Texas) writes that a set of documents provided to the House Financial Services Committee did not adequately describe the Fed’s response to admissions by banks that participate in setting Libor. (On the other hand... read: Did Fixing Libor Keep Financial Crisis From Getting Worse?)

Neugebauer is the chairman of the oversight and investigations panel of the Financial Service Committee.

The letter asks the Fed to turn over almost all Libor-related communications and documents from 2007 to 2012, including internal Fed documents and communications with banks. It also asks for communications with other U.S. regulators and U.K. regulators.

The letter indicates that lawmakers are attempting to shine a light on the Fed’s role in the growing Libor scandal. The extensive document request indicates that Congressional investigators are expanding their probe.

’’What we’re going to do now is expand our inquiry into the domestic banks and see what kind of dialogue began with the Fed and these banks,’’ Neugebauer said in an interview on CNBC last week.

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