House panel seeks more documents from NY Fed on Libor probe

Reuters News
Posted: Jul 23, 2012 12:56 PM
House panel seeks more documents from NY Fed on Libor probe

By Aruna Viswanatha and Sarah N. Lynch

WASHINGTON (Reuters) - A U.S. House panel on Monday asked the New York Federal Reserve for a second round of documents as part of an investigation into possible manipulation by top banks of a benchmark interest rate known as Libor.

The House Financial Services Committee asked the Federal Reserve Bank of New York for all communications going back to August 2007 with the banks that help set Libor.

The committee is investigating how the New York Fed, which oversees the banks, responded when it first learned about the possible manipulation.

The New York Fed received the committee's letter and will continue to try to publicly release any documents it turns over to Congress to the extent possible, an official said.

The New York Fed has been pushed to release internal documents amid a furor touched off last month after Barclays PLC agreed to pay $453 million in fines for attempting to manipulate Libor.

Criminal and civil investigations into the issue by U.S. and UK authorities are ongoing, and arrests of individuals could come soon, sources told Reuters.

Earlier this month, the New York Fed released a slew of documents to the House committee that showed Barclays had alerted U.S. regulators as far back as 2007 to concerns that banks were rigging benchmark interest rates.

Policymakers on both sides of the Atlantic did not appear to take decisive action, underscoring the chaos of the financial crisis.

In its Monday letter to New York Fed President William Dudley, the House panel sought to clarify what action the New York Fed took after "admissions of market manipulation" by the Libor contributing banks.

The committee asked the New York Fed to turn over the documents by September 1.

The House panel is also seeking the New York Fed's communications with U.S. and British regulators, including the Commodity Futures Trading Commission and the Financial Services Authority.

(Editing by Maureen Bavdek and Lisa Von Ahn)