On Wednesday, lawmakers grilled Treasury Secretary Timothy Geithner as to why he failed to stop the fraudulent manipulation of the LIBOR (London Interbank Offered Rate) interest rate when Fed bank documents show officials were alerted to a possible problem as early as August 2007.
Mr. Geithner responded:
We, at least I, first learned about those concerns in the early parts of spring of 2008 and we acted very quickly at that stage. At that time, this is in the spring of 2008, we took a very careful look at these concerns, we thought those concerns were justified.
And 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.
Still, the Fed itself continued to use the LIBOR rate. Rep. Scott Garrett seized on the glaring inconsistency:
You have been before this committee countless numbers of times since 2008, and if this is the crime of the century, as so many people are reporting today, never once did you ever once come and mention it as being a problem -- never once did you come here and say this is what you're going to do about it.
Similarly, Rep. Jeb Hensarling challenged Geithner:
It appears that the early response was to keep using it, which means it appears that you treated it as almost a curiosity or something akin to jay-walking instead of highway robbery.
Mr. Geithner's response: "I think that was the best choice at the time."
As Breitbart News has reported, the LIBOR scandal may be the biggest banking scandal in history, as Barclays--and potentially other banks--allegedly tried to rig the benchmark interest rate, which is used to set an estimated $800 trillion of securities.
So far, Barclays has paid $455 million in fines to U.S. and U.K. regulators.