Tim Geithner Admits Banks Bailed Out With Rigged Libor, Costing Taxpayers Huge Amount


Tim Geithner Admits Banks Bailed Out With Rigged Libor, Costing Taxpayers Huge Amount

Timothy Geithner claimed on Wednesday that the government had no choice during the financial crisis but to lend to banks and AIG using an interest rate, Libor, that everybody knew was flawed.

Call it a back-door bailout: By using an artificially low Libor, the government saved the banks and AIG millions, maybe billions — and cost the taxpayers the same amount.

The use of Libor in the bailouts also rubber-stamped that hopelessly manipulated interest rate as a market measure, raising still more questions about just how worried Geithner and other regulators really were about it.

In a House Financial Services Committee hearing on Wednesday, Treasury Secretary Geithner was asked why Treasury and the Fed used the London Interbank Offered Rate as a basis for loans to insurance giant American International Group and to U.S. banks under the Term Asset-Backed Securities Loan Facility — even though Geithner and other regulators had long suspected that Libor was artificially low, as Geithner testified.

“We were in the position of investors around the world,” Geithner shrugged. “You have to choose a rate, and we did what everybody did — use the best rate available at the time.”

Rest here…

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Comments
4 Responses to “Tim Geithner Admits Banks Bailed Out With Rigged Libor, Costing Taxpayers Huge Amount”
  1. Mystify says:

    The founding fathers would say hang ’em!

  2. see says:

    Yeah they used the best rate available at the time and they knew the rate no good. WTF

  3. talktotennessee says:

    Lay down with dogs. . . . .
    Get up with fleas. . . . .
    Ahhhh its okay, only taxpayer’s money! But taxpayers get NO justice, no perks, no relief and Tim couldn’t demand or negotiate with banks for a deal for taxpayers while he is holding hands with the devil!

  4. Okay

    When do the riots begin…

    “had no choice”.. Really Timmy? No choice for what tpo take care of the financial institutions who arre really running America

    Harkens back to the times of Adams, Jefferson and the other founding fathers

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