The Federal Reserve Bank of New York said Friday that it received reports of problems with the setting of the London Interbank Offered Rate (Libor) back in 2007, before the issue first came to public attention.
The New York Fed issued a statement indicating that as part of its market surveillance efforts following the onset of the financial crisis in late 2007, it received “occasional anecdotal reports from Barclays of problems with Libor”.
The bank says that in the following spring, after the failure of Bear Stearns, and shortly before the first public report on the issue, “we made further inquiry of Barclays as to how Libor submissions were being conducted.” And, it says it subsequently shared its analysis, and suggestions for reform of Libor, with the relevant authorities in Britain.
Last month, U.S. and British authorities announced huge penalties against Barclays for its attempted manipulation of Libor and Euribor, stretching back to 2005. The British Bankers Association is currently reviewing the way Libor is set and is expected to publish its findings shortly.