July 17, 2012
The heads of the US and UK central banks have described as “fraud” the manipulation by Barclays of the international lending rate, Libor.
The US Federal Reserve chairman, Ben Bernanke, said the process for setting the rate was “structurally flawed” and that he could not guarantee its reliability.
Mervyn King, the Bank of England governor, said that deliberately rigging the Libor rate for private gain was “my definition of fraud”.
The bankers were testifying before lawmakers on both sides oof the Atlantic. Bernanke told a Senate banking committee hearing that there was little the US central bank could do to reform the system, which has rattled investor confidence in financial markets, because it has no control over how it is set.