The Libor scandal continues to rage on in Britain, after it was revealed that the rate of borrowing from bank to bank was, well, rigged.
In 2008, then president of the New York Federal Reserve Timothy Geithner noticed something might be wrong. So he took the strongest possible action he could think of: He sent a memo.
His list of recommendations was apparently looked at, and four years later, Barclays, the British mega-bank, has paid hundreds of millions of dollars in fines for rigging the Libor rate. Treasury Secretary Geithner testified to the House Financial Services Committee yesterday, saying he took appropriate action at the time.
Some have criticized Geithner, saying he should have done more to prevent the crisis. But according to Hugo Dixon, founder and editor of BreakingViews at Reuters, and Karen Petrou, managing partner of Federal Financial Analytics in Washington, there's not much you can do in the West when you're dealing with the Wild Wild East.