King Defends BOE Libor Role After Scrutiny on Geithner Memo

Bloomberg reports that King told Parliament’s Treasury Committee in London Tuesday that the e-mail sent by the then president of the Federal Reserve Bank of New York included recommendations rather than allegations at a time when global regulators were expressing concern on the quality of the borrowing benchmark.

'Mr. Geithner was sending that to us as a suggestion for how these rules should be constructed and we agreed with him, but neither of us had evidence of wrongdoing', King said. 'The first I knew of any alleged wrongdoing was when the reports came out two weeks ago'.

King and Financial Services Authority Chairman Adair Turner faced repeated questioning today on Libor and their roles in the resignation of former Barclays Plc (BARC) Chief Executive Officer Robert Diamond. At risk is the Bank of England’s reputation as the guardian of London’s financial district at time when the government is preparing to put it in charge of regulation.

E-mails released Tuesday show that Deputy Governor Paul Tucker encouraged contact between Barclays, HSBC Holdings Plc (HSBA) and Royal Bank of Scotland Group Plc on the subject of Libor during the 2008 banking crisis, when he was markets director.

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King Defends BOE Libor Role After Scrutiny on Geithner Memo