Barney Frank: Timothy Geithner Libor Scandal Is Bush’s Fault
According to Democratic Representative Barney Frank, the onus stemming from the Libor rate-rigging scandal does not fall to the shoulders of Timothy Geithner. It’s George W. Bush’s cross to bear.
Geithner is currently busy testifying before the House Financial Services Committee on the so-called Libor scandal, and Congressman Barney Frank couldn’t even wait 20 minutes before defending Geithner by blaming the whole thing on former president George W. Bush. Frank said he felt nostalgic for the days of 2006, as he blamed the less-than-aggressive response of U.S. policymakers on Republicans, reports the Business Insider.
“I do want to remind people that this all happened under the administration of President Bush,” said Frank, toting an all-too-familiar rhetorical line. “The notion that this was all the problem of the president of Federal Reserve of N.Y. is frightening.”
Frank further moved to remove Geithner from responsibility, calling him “important but not one of the top administration officials,” and pointing instead to two Bush-appointees: Federal Reserve Chairman Ben Bernanke and then Treasury Secretary Henry Paulson.
The Libor rate-rigging scandal, in brief: 16 banks are being investigated for allegedly rigging the Libor rate, which is an interbank lending rate that acts as a benchmark for interest rates around the world. This rate affected taxpayer loans to banks and AIG during the financial crisis, and investigators say banks may have been rigging this rate for decades (for their own profit, of course).
Geithner said that he discovered this fraud “early on,” notifying regulators in 2008. “We took the initiative to bring those concerns to the attention of the broader U.S. regulatory community, including all the agencies that have responsibility for market manipulation and abuse,” Geithner said.
He’s in trouble, because he should have done more. “I don’t understand why they didn’t investigate,” said former chair of the Federal Deposit Insurance Corporation Sheila Bair. “They did have authority to do that.”
Frank is also severely downplaying Geithner’s authority in 2008. Geithner was president of the Federal Reserve Bank of New York, and served as the vice chairman of the Federal Reserve, making him the Fed’s second-highest-ranking official. The New York Fed directly oversees the financial industry and is the most powerful district of the Federal Reserve, reports the Huffington Post.
Something smells fishy.