US Treasury Secretary Timothy Geithner urged UK Bank of England governor Mervyn King in 2008 to reform the London interbank offered rate (Libor) process to prevent ‘deliberate misreporting’.
Geithner, then head of the New York Federal Reserve Bank, sent King a private email warning him about irregularities in the Libor rate four years ago.
In June 2008, Geithner called for measures to ‘eliminate (the) incentive to misreport’ the rate.
The then US central banker attached a report to the email entitled ‘Recommendations for Enhancing the Credibility of Libor’, that proposed a raft of reforms designed to prevent ‘accidental or deliberate misreporting’.
The latest revelation comes in the wake of the UK regulator, the Financial Services Authority (FSA), fining Barclays £290m for Libor rate-rigging by its traders.
Geithner’s email called for a ‘more credible reporting structure’ and broadening of the number of banks that were included in the measurement of Libor.
The Bank of England has responded by saying the British Bankers’ Association had launched a review of Libor in June 2008 and assured the Bank it would ‘take on board the recommendations’ from Geithner.
The Bank published its own correspondence, showing that King had told Geithner his proposals were ‘sensible’ and had passed them on to the BBA.
In an email to deputy governor Tucker on June 3rd, 2008, BBA chief executive Angela Knight wrote that ‘changes are being made to incorporate the views of the Fed’.
Meanwhile former Barclays executive, who was at the heart of the rate-rigging scandal, Jerry del Missier has left the bank with nearly £9m.
Missier, who resigned as the bank’s chief operating officer three weeks ago, negotiated a severance deal worth at least £8.75m in the days before he quit.
The Canadian banker was one of Barclays highest paid executives with a salary and bonus package for 2011 worth £6.7m, plus a further £10.8m from share awards from previous years.
