Editor’s Note – As Timothy Geithner, Treasury Secretary and former Federal Reserve Bank Governor, testified in Congress, it was clear that Congress was finally taking notice, and its time all of America understands what took place, how it effected our financial status as a nation and individually, and how it was key to the financial meltdown of 2008.
Its time for Congress to go after its own as well, time to go after those who looked the other way or were complicit like Barney Frank, Chris Dodd, Ben Bernanke, Hank Paulson, and our own tax-delinquent Treasurer – Timothy Geithner. Wait, it was all Bush’s fault though, right?
Congress Expands Libor Probe To Big Three Domestic Banks
When the Fed released its “trove” of materials confirming that the Fed indeed knew that the Barclays was manipulating its Libor submissions (amusingly explained by Ben Bernanke before [the] Senate today that “the employee had no idea what Libor is in that case”), few were surprised, but more were confused why the congressional inquiry focused solely on the Fed’s interactions with British Barclays, instead of focusing on the three domestic banks that were part of the BBA’s USD Libor fixing committee. And only three US banks. As we observed previously:
And while the DOJ may not have gotten the memo just yet that of the 16 LIBOR fixers, 3 were US, and all most certainly engaged in the same manipulation that has now cost Barclays the posts of its Chariman, CEO and COO, some Congressmen have gotten the memo.
“Congressional investigators probing banks’ efforts to rig the London interbank offered rate plan to request correspondence between the Federal Reserve and U.S. banks that help set the rate.” 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,’’ Representative Randy Neugebauer, a Texas Republican and chairman of the oversight and investigations panel of the U.S. House Financial Services Committee, said in an interview on CNBC today.”
Which banks? In this case, those who should be investigated.
Neugebauer intends to request correspondence between the Fed and the three U.S. banks on the Libor-setting panel, JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Bank of America Corp., according to a congressional aide, who spoke on condition of anonymity because the details were not yet public.
The U.S. central bank is drawing more scrutiny from lawmakers critical of its record as a bank regulator after the New York Fed released documents showing it was aware that Barclays Plc (BARC) underreported borrowing costs in 2008. Neugebauer requested the documents, which were made public July 13.
And where it gets tricky is that the Chairman today already made it very clear that Libor manipulation is “unacceptable behavior.” He may have a harder time explaining if it is next uncovered that not only did the Fed know that Barclays was engaging in such unacceptable behavior, but that the three biggest US banks, two of which – BofA and JPM – had the lowest Libor submissions around the time in question, as Zero Hedge first demonstrated, and one of which is still an indirect ward of the state, not only did the same, but were encouraged by the Fed to do so.
Sadly, the UK does not have Dancing with the Stars and Jersey Shore, which is why heads have rolled. In America, first the general populace has to understand why all of this is important, then it has to grasp who is at fault, and finally that it was all really the Fed’s fault. Sadly, with $0.99 iDistractions and reality TV, this is never going to happen.
And with “probers” like Chuck Schumer around, who needs aliens?
But one can dream.