Geithner defends his role in LIBOR-rigging scandal

US Treasury Secretary Timothy F. Geithner testified today about the heavily-criticized role he played in the 2008 rate-rigging scandal. In a House Financial Services Committee meeting, Geithner defended his 2008 dealings with the London Interbank Offered Rate, or LIBOR, the Los Angeles Times reported. Geithner had been serving as president of the Federal Reserve Bank of New York when he learned that the LIBOR was vulnerable to manipulation by major banks. But despite concerns that the LIBOR was being under-reported, Geithner said that he and other Fed officials saw no problem with using it as a basis while setting the terms for billions of dollars in bailout loans. 

"We, like investors around the world, had to take advantage of the rates available at that time, and we chose LIBOR at the time like many others," Geithner testified today, according to the LA Times.  

More from GlobalPost: When the BRICs crumble

Geithner has been accused of not doing enough to stop the manipulation of LIBOR, a key interest rate, Reuters reported. Geithner said he learned about the problem in 2008. But his statements contradict a statement from the New York Fed, which says that the bank regulator knew about the problems as early as 2007, according to Reuters. 

Geithner's testimony received heavy criticism from Republican lawmakers, who wonder why he didn't bring up the manipulation sooner. ‘‘You have appeared before this committee countless times since 2008,’’ Rep. Scott Garrett, R-N.J., asked Geithner, according to the Associated Press. ‘Why did you never mention it to the committee?’’

The LIBOR is an important interest rate determined by a daily poll carried out by the British Bankers’ Association, Bloomberg News explains. The poll asks banks to estimate how much it would cost for them to borrow from each other.