Congress Prods N.Y. Fed for More LIBOR Info

House committee tells NY Fed president it is still unclear how Fed handled charges of manipulation

More On Legal & Compliance

from The Advisor's Professional Library
  • Proxy Voting RIAs are not required to vote proxies on behalf of their clients. However, when an RIA does assume responsibility for voting proxies, the firm’s policies and procedures should help to ensure that votes are cast in the best interest of clients.
  • Code of Ethics Rule The Code of Ethics Rule, found in Rule 204A-1, uses severe consequences for violation to help ensure investment advisors will do the right thing.  

The chairman of the House Financial Services Oversight and Investigations Subcommittee told the New York Federal Reserve Bank Monday that he wants more information about the handling of banks’ alleged “manipulation and suppression” of the London Interbank Offered Rate (LIBOR).

In a Monday letter to the Fed branch's president, William Dudley, the subcommittee chairman, Rep. Randy Neugebauer, R-Texas, said that the previous information Dudley had presented revealed that the New York Fed knew that certain financial institutions were “not posting honest LIBOR rates.” He said the documents showed that the Fed “worked to identify flaws in the way LIBOR was set and subsequently made recommendations for enhancing the credibility of the rate to the Bank of England.”

However, Neugebauer told Dudley that “what is less clear” was how the Fed “dealt with admissions of market manipulation by LIBOR-contributing banks.”

Said Neugebauer to Dudley: “As you know, the role of the government is to ensure that our markets are run with the highest standards of honesty, integrity and transparency. Therefore, any admission of market manipulation—regardless of degree—should be swiftly and vigorously investigated.”

Neugebauer told Dudley that “there are many outstanding questions” regarding the NY Fed’s role in the LIBOR scandal. The letter asked that by Sept. 1, the New York Fed provide documents on all communications since August 2007 among its employees and with U.S. and British government officials, as well as with regulators in both countries, the British Bankers Association and employees of LIBOR-contributing banks, on the setting of LIBOR.

Reprints Discuss this story
This is where the comments go.