WASHINGTON -- The Federal Reserve Bank of New York released documents Friday that show it learned five years ago of big banks understating their borrowing costs to manipulate a key interest rate.
The documents also show that Timothy Geithner, then president of the New York Fed and now U.S. Treasury secretary, urged the Bank of England to make the rate-setting process more transparent. A congressional panel requested the documents and is investigating manipulation of the London interbank offered rate (LIBOR) rate, which affects the interest paid on loans.
The LIBOR process has come under scrutiny since Britain's Barclays bank admitted two weeks ago it had submitted false information to keep the rate low.
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