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FBN’s Charlie Gasparino on lawmakers on the House Financial Services Committee preparing to question Treasury Secretary Timothy Geithner on what he ...
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Treasury Secretary Timothy Geithner has long been expected to appear later this month in front of the house financial services committee on the second anniversary of Dodd-Frank.
Ostensibly to talk about Dodd-Frank.
But it now may not go as planned Charlie Gasparino.
Has the latest -- we were first report you know that he was gonna speak at this hearing and probably talk.
At the time we thought about the London whale that was the news of the day not necessarily Dodd-Frank you're just a mortgage rate mortgage -- that they lost.
Whatever may -- five billion dollars by autograph find out about that later in the week on Thursday they're gonna get -- on Friday excuse -- They're gonna give us the estimate just how much on the worst worst case scenario.
Boom and from what I understand the committee now is much more interest and what Tim Geithner knew -- didn't know about this lot Barkley libel Libor scandal that's that the alleged manipulation of libeled by -- why is that.
He's now Treasury Secretary back when this was going on -- around 20072008.
He was New York fed fed president.
Huge regulator of banks what we do know now with the New York fed released today.
Was that they were kind of in the loop I'm what was going on they were -- -- requiring they were getting some information from Barkley he's.
That there could be possible manipulation and guess who when your head of the New York fed.
You would think -- you know some about this and from what I understand.
How's -- -- yet members of the house financial services committee which is doing this conducting this hearing.
That members are prepared to grilling a little bit on this issue what did you know Tim Geithner -- you know it.
And give us a little background on how Libor can be manipulated.
By a bank that's regulated by the New York that we should point out Barkley is chiefly regulated by UK regulators because it's Barclays bank based in the UK.
But they do you have a huge subsidiary here in New York which Bob Diamond used to run Ford became the CEO he resigned as you know last week.
That's Barclays Capital that's where the fate -- right there but the New York fed is the largest Federal Reserve Bank the most important bank -- -- the most important bank.
It regulates too big money center banks are located here in New York.
That makes it extremely important we should point out that Barclays Capital is located right around the corner right.
Because right around the corner of Vista via Lehman Brothers and they took over what it took what they they took to building they also build out that that's an interest in definition -- -- put the definition of what the New York fed is.
This I don't think people really understand that this is an incredibly powerful regulator.
This is like Tim Geithner now Treasury Secretary.
He had -- this agency.
And it's controversial because a lot of people said -- guys headed this agency where you there when the financial crisis was going on or before -- undertaken all that -- didn't do anything about it.
Well that's that's that's the criticism they regulate AIG.
An insurer.
I believe they do I thought it was -- insurance here's why every letter of New York.
They actually insurance -- -- AIG had a massive financial services.
Arm which got in trouble Dutch financial products so I believe I believe the Fed New York fed does -- on the -- curve.
Story that's what I don't -- do everything I I believe they do because we should point out that the Fed in conjunction with the treasury.
Bailed out AIG back in 2000 remember I was the first to report that as might -- when I went on.
Brand -- reported that there was two other reporters number of -- -- reported that.
The Fed and the treasury the government is likely to bail amount looking at -- around -- of the reporters at this at the network amount said that's not true.
-- actually and they were wrong a couple hours later -- -- let me just make this point.
Just so that people understand Libor is the London Interbank offered rate which is a form of an interest rates it's compiled by sixteen global that we she's been like -- we're clear here because people there's a lot of these terms -- a little high for six critically important to everybody.
To the man on the street -- your credit card interest rate is set off Libor and they were meant what exactly are your housing your your -- -- is -- The theory was member this is set by these banks these banks give them.
They're borrowing rates what they have the Barak and when you combine that any decent sort of blended average step becomes Libor what he said -- too low well -- -- You're manipulating -- -- you've been at the head of the Libor story as well and as it pertains to -- -- auction do you know around like a broken clock I told you and I said -- was like you know it is post.
It did.
It was that was a sign that wasn't to ease the hard to figure out you know like UK regulators are thirty times tougher than these policies and American diet and.
I beg to tougher but I thank you very much Charlie -- for.
