He'd rather have spent his time warning about the European threat to the American economy, or the need for tax reform. But Treasury Secretary Tim Geithner spent most of his visit to Congress this morning defending his failure to tell the public or prosecutors that bankers were artificially lowering the London Inter-Bank Offered Rate (Libor), the world benchmark used to set loan, bond and derivative interest rates, back in 2008, when he was head of the New York Federal Reserve.
Geithner saw Libor lying as "something akin to jay walking, as opposed to highway robbery," complained Rep. Jeb Hensarling, R-Texas.
"You have appeared before this committee countless times since 2008," so "why did you never mention it to the committee?" asked Rep. Scott Garnett, R-NJ.
"The regulators did the necessary appropriate thing in this context and started that process very early," Geithner said in his defense.
"These concerns were in the public domain," he told them. "Major newspapers of record" -- Wall St Journal, Financial Times -- wrote about Libor manipulation.
"We took the initiative to brief the broader regulatory community so they had the information" too. Though not the Justice Department. "And we pushed the British to resolve it. We did that very early and very very quickly." Not his fault, he said, that the British took until this year to bust Barclay's, the first bank to cop to cooking the numbers.
"We gave them very specific detailed changes for doing that. If those had been adopted sooner, you would limit this risk going forward."
Barney Frank, D-Mass. tried to shield Geithner. "There’s been an effort to kind of blame you for all of this," Frank said. But the Bush administration's Treasury department and other officials should have acted, he added: "You were important, but not that important."