Geithner Testifies Before Congress

Thursday, July 26, 2012

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.

Guests:

Hugo Dixon and Karen Petrou

Produced by:

Brad Mielke

Comments [2]

Larry Fisher from Brooklyn, N.Y.

The best part about writing about the insane ways the Financial World have mishandled money is that the only thing left to do is think about the situation in absurd metaphorical terms.

This is what we know

1. The Financial World contains people who are shady. Not everyone, but enough people to create an unstable world economy

2. We find out the different ways they are shady; i.e. the sub prime mortgage fiasco, money laundering for drug dealers, cooking the books about Libor etc. etc. etc. (more to come)

3. We know that no one who is found guilty goes to jail. Maybe they lose their job. Maybe they get to work for the government and explain what they did.

4. We know that this will continue and that inevitably the world economy will get worse and collapse.
5. We know that the financial world is not worried about a collapse because they have protected themselves.

So, my proposal to all listeners of The Takeaway is to come up with the metaphorical story which will make us laugh about the situation.
For example, I have thought about the economy as letting kids have free reign of a cookie jar.

I have thought of the economy as The Titanic... I know, I know that is an easy one.
What is your metaphorical economic takeaway about the situation.

Jul. 26 2012 11:30 AM
listener

A Secretary of the Treasury who submitted two budgets for the United States and failed to get a single vote in the US Congress submits a "memo" to the UK which should be taken seriously?

Perhaps Romney himself could give better advice whilst he is in London.
Geithner's tax problems when nominated for Treasury Secretary was strangely no big deal for the Obama administration that now is demanding years of tax filings from Romney.

Does that "seem incredible"?

Jul. 26 2012 09:22 AM

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