New York Fed Gets More Time to Give Congress Libor Info

The Federal Reserve Bank of New York was given more time to comply with a congressional request for information about staff communications with banks involved in setting the London interbank offered rate.

Representative Randy Neugebauer extended a Sept. 1 deadline for the Fed to release communications on Libor rate submissions from August 2007 until July of this year between employees of the New York Fed and those at 16 banks, according to Jeff Emerson, a spokesman for the House Financial Services Committee. The Fed will have until the end of September to comply, he said, without specifying a date.

The U.S. central bank has come under increased scrutiny from lawmakers critical of its record as a bank supervisor after the New York Fed released documents on July 13 showing it was aware that Barclays Plc underreported Libor rates in 2008. In a letter sent July 23 to William C. Dudley, president of the New York Fed, Neugebauer said there are still “outstanding questions that merit further investigation.”

Neugebauer, a Texas Republican, is the chairman of the Subcommittee on Oversight and Investigations of the House Financial Services Committee.

Barclays was fined a record 290 million pounds ($459 million) in June for rigging interest rates, and the scandal cost Chief Executive Officer Robert Diamond and Chairman Marcus Agius their jobs. At least a dozen banks are being investigated.

The documents released by the New York Fed showed that Timothy F. Geithner, then the president of the regional Fed bank, sent a memo in June 2008 to Bank of England Governor Mervyn King recommending changes to how Libor was calculated.

“We brought those concerns to their attention and we felt, and I still believe this, that it was really going to be on them to take responsibility for fixing this,” Geithner told the House Financial Services Committee on July 25. He also said he raised concerns to other U.S. regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission.

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