Bank of England Head Denies Wrongdoing in LIBOR Scandal

The head of the Bank of England said on Tuesday that he found out about the libor scandal only two weeks ago, along with everyone else. The scandal involves manipulation of the London Interbank Offered Rate (libor), which averages interest rates submitted by banks under the supervision of the British Bankers Association. The libor is the benchmark for $800 trillion in financial instruments, and almost every fragment of debt that is issued to consumers around the world is connected to it.

Last month, Barclays admitted that it had colluded with JP Morgan Chase, Bank of America, Lloyd’s and 12 other big banks to manipulate the libor. The Bank of England, the Federal Reserve, and now U.S. Treasury Secretary Timothy Geithner have also been accused of aiding and abetting this illegal manipulation.

But Bank of England Governor Mervyn King has denied the allegations. Speaking to a House of Commons committee on Tuesday, he said the earliest he knew of the alleged wrongdoing was “when reports came out two weeks ago.”

“We had been through all our records,” he said, “there is no evidence of wrongdoing or reporting of wrongdoing by the bank ….”

Despite King’s claims, evidence is mounting that bodes poorly for him and dozens of other upper-echelon financial authorities. This developing landmark scandal could derail the British and American financial systems. For more, read our article, “libor: the Biggest Con in Financial History.”