“Documents to be released Friday will show the New York Fed took prompt action four years ago to highlight problems with [the London interbank offered rate] and press for reform,” a central bank official said, according to The Wall Street Journal.
The Fed announced plans to release the documents after allegations surfaced that the central bank may have known about Libor manipulation by banks in 2007 and 2008.
Last month, British bank Barclays agreed to pay $453 million in a settlement with U.K. and U.S. authorities who maintain that bank traders purposely tried to manipulate Libor, a key interest rate arrived at by averaging banks’ estimated borrowing interest rates, The Wall Street Journal reports.
Sen. Richard Shelby (R-Ala.) pointed to discussions between Barclays and New York Fed officials that have surfaced following the probe into Barclays.
“There [were] a number of conversations,” Shelby said, according to The Wall Street Journal. “We need to know what they were. Was the bank, headed by Geithner, asleep? Were they complicit? Did they look the other way? Heck, we don’t know.”
The New York Fed said earlier this week that it was cooperating with U.K. authorities to suggest Libor reforms.
“The manipulation of Libor affects trillions of dollars of loans,” Shelby said, The Wall Street Journal reports. “Just about every consumer in this country is affected. We need to get to the bottom of this.”