Timothy Geither on LIBOR Manipulation ‘We Did the Right Thing’

CNBC lobbed Timothy Geithner a softball this morning to allow the Treasury Secretary an opportunity to explain away his role in the LIBOR manipulation scandal.
CNBC softball: ‘ Let me just ask you this recent libor –I’m reluctant to call it a scandal but an libor flap.  The Wall Street Journal editorial and lots of other people are saying Tim Geithner knew about this, wrote a memo in 2008.  If it was such a great problem or such a great scandal why Mr. Geithner did regulators do so little? Why didn’t you make a bigger stink?‘

Geithner’s response?:  ‘We did the right and necessary thing and we did it early.’

If by ‘we did the right thing’ you mean handed down explicit instructions on what rates should be submitted by the banks, then yes Timmy, we are positive you did do ‘the right thing’ for the TBTF banks and the Fed.

Turbo Timmy’s Full response on LIEBORGATE below:

Geithner: Let me explain what this is and what we did. We acted very early in response to concerns that the processes used to set this rate is vulnerable to misrepresentation. We were worried about it. We were concerned about it. I took the initiative to brief the entire u.s. regulatory community on this at a very early stage, early may. My staff then briefed the scc, ftc. we took the exceptional step of writing them — putting in writing to them a detailed set of recommendations that revealed the extent of the concern in that context and the u.s. to its credit set in motion at that stage a very, very powerful enforcement response.

The first results of which you have now seen. again, the test of any — being the barclays changes? ftc, justice, sfa action. Very powerful enforcement action. Very important to do. Very consequential deterrent and more steps to come. They have not fixed the problems at the center of this raid. They took some modest reforms in response to the suggestion in ’08 but they didn’t go far enough and we have now taken the initiative to set up a broader effort involving all of the countries that matter around the world. Have a big stake in this to push and what happens now is reforms that fix the underlying problem. The British, central to that and not leaving it to the British because the world has a stake in fixing this.

So we did the right and necessary thing and we did it early. We were forceful from the beginning and you have seen now a very forceful enforcement response, more to come on that and you are going to see a what I think ultimately will be a very effective reform effort led by a more global effort than the first time.