Federal Reserve Chairman Ben Bernanke on Tuesday defended U.S. regulators’ response to allegations in 2008 that a key global interest rate was being manipulated.
But Bernanke said that even today he can’t guarantee that the Libor rate is accurate because few of the reforms proposed by U.S. regulators at the time were accepted by British banking officials.
"I can't give that assurance with full confidence," he said in testimony before the Senate Banking Committee.
Bernanke painted a picture of an aggressive response by the New York Federal Reserve, which he said quickly offered proposals for structural reform for accurately setting interbank borrowing rates.
“There was a substantial response by the Federal Reserve Bank of New York,” Bernanke said.
In later testimony, he agreed that the scandal has contributed to a loss of faith among investors that markets aren’t rigged.
Current Treasury Secretary Timothy Geithner has been targeted for criticism since it was revealed last week that he, as head of the New York Fed in 2008, was aware of allegations the Libor rate was being manipulated.