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Tangent Capital Partners senior managing director Christopher Whalen argues it was Geithner’s duty to notify the authorities on interest-rate manipu...
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That's less -- Treasury Secretary Tim Geithner wrapping up his testimony in Capitol Hill just a short time ago he was grilled.
On the -- scandal and acknowledged that there are some fundamental problems.
We were aware of the risk that the way this was designed create not just the incentive for banks to under report.
But gave them the opportunity to under -- and that was a problem.
But with its concerns.
Did he do not -- do anything joining me now is Christopher Whalen changing capital partners and senior managing director.
Chris I I mean first of what he's gonna test nightstand and they did they did give -- quite hard time America -- -- have a hard time was would have given really what would you -- But work -- the Fed and one of the things that the Fed is an agency does this communicate through other agencies so through no there's a problem.
And we now know today by the whether it is going to be criminal referrals right why didn't Tim Geithner get in touch -- -- us attorney's office and say hey you should look at us.
Because of term that comes to mind is accessory after the fact he said nothing -- and -- is whose duty to do so.
Although he's saying that he alerted the European authorities -- -- -- congress is saying did you say did you send a letter to anyone in congress did you pick up on did you call just as.
With the European authorities don't matter this is OUS criminal matter potentially we -- -- prosecutions here.
And it's a matter of course whenever piece of paper comes into the Fed they always communicated with criminal.
And and judicial agencies for -- whose recent.
But he I mean just as the devil's advocate here it is the London Interbank rate you know those -- the authorities are regulated that's inside -- -- well doesn't he learned.
US banks do business in that market.
And more importantly US consumers US businesses who -- financial institutions.
The Tim Geithner was responsible for regulating were affected by the sensitivity.
There may be violations of view us law -- -- a duty to him the ball off of the US attorneys -- look at this this isn't my job they'll present New York fed is on a criminal.
Agency in Minnesota he -- at least say have to sort of a letter.
You know I I think you're right and I also think it feels like maybe he's being hung out to -- -- little -- at this point it doesn't -- -- getting a lot of support Washington it seems like he might be expendable at this point we're.
-- already said it's gonna go either way do you think that's too dramatic.
Look I worked in Europe every European rate is fixed that's what they call -- the fixing.
And what was the same way all of the banks apparently European rate aspects absolutely for the benchmark rates April bond a referral or short term rate.
They'll come together of the talk about it and they they they have a fixing concentrated in Frankfurt same thing all the German government bonds for fixed every morning.
Ironically enough the same term -- -- saying -- this is a really a market rate.
But that's not really the point if they were manipulating the reporting of this consensus based indication.
Then absolute criminal act and and he should've let somebody know about this so what do you think are the implications for -- camera.
Plus who say Geithner I think was -- believe go back to the private sector this may speed that but I think it also illustrates his role as a protector of the big banks.
You know once again we -- the Tim Geithner is not doing the right thing he sandbagged him what should've been an open.
Discussion between the Fed and other regulatory and and our criminal organizations and says wait a minute.
You need to look at this to see if there's -- a civil issue or criminal issue that deserves prosecuting.
-- impacting the big banks -- -- -- Charlie -- an article about that recently gallon you know it's funny we have Cindy while out on the wire today you know talking about breaking them up how can you manage something epic.
-- -- -- I think JPMorgan in the whole Bruno axle will case is the -- some point they didn't really know where they should've known what was going on here.
And they didn't so it's a breakdown in systems and controls and only if you're gonna have people be diligent whether it's -- present New York fed.
For the -- over large bank can even trying to get your arms from this company now Chris well on break point thanks cannot thank you.
Right -- we're taking it to the sky.
