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5 Years : From May 2011 to May 2016
By Kristina Peterson
WASHINGTON--Two Republican lawmakers said Wednesday they would keep the Senate from considering a Treasury Department nominee until Treasury Secretary Timothy Geithner answers questions on the investigation into distortions of a key global interest rate.
GOP Sens. Charles Grassley of Iowa and Mark Kirk of Illinois said in a statement they would block quick confirmation for Richard Berner, whom President Barack Obama nominated in December for a six-year term heading the new Office of Financial Research. The office was created by the Dodd-Frank financial overhaul to help spot financial crises in the making and assist regulators.
The lawmakers said they were blocking Senate consideration of Mr. Berner until Mr. Geithner responds to a letter they sent in early October asking for more information about the Treasury Department's handling of problems associated with the London interbank offered rate, or Libor. Mr. Grassley also complained that the Treasury Department had canceled briefings scheduled with his staff without rescheduling them.
"Taxpayers need to know there's a cop on the beat at the Treasury Department, making sure the interest rates they pay on everything from home loans to retirement investments aren't rigged," Mr. Grassley said in a statement. "Given the widespread effects of this manipulation, it is disturbing to see that the Treasury Department has thus far refused to answer basic questions and provide essential documents."
Earlier this year, Barclays PLC (BCS, BARC.LN) reached a $451 million settlement with U.S. and U.K. officials in response to allegations that it improperly reported rates and distorted Libor. Records released after the settlement showed Federal Reserve Bank of New York employees knew the U.K. banks was misreporting interest-rate data, and U.S. regulators later proposed changes to the way the rate was determined by the British Bankers Association.
The senators on Wednesday proposed considering a U.S.-based interest rate index.
In their October letter, the senators criticized Mr. Geithner, who was the president of the New York Fed in 2008, for not acting more aggressively to stop the use of the flawed rate. They asked him to respond within two weeks to five questions concerning the Libor investigation.
In a congressional hearing in July, Mr. Geithner said U.S. officials took the appropriate steps by alerting British authorities about the problem.
The Treasury Department didn't immediately respond to a request for comment on Wednesday.
The lawmakers' objection means the Senate can't confirm Mr. Berner quickly under "unanimous consent," along with other uncontroversial nominees. A separate vote on Mr. Berner would then require other procedural hurdles and become much more time-consuming.
Earlier Wednesday, the Treasury Department named former Federal Reserve Vice Chairman Donald Kohn, now a Brookings Institution scholar, and 29 others to the Office of Financial Research's advisory committee.
--Tom Barkley contributed to this article.
Write to Kristina Peterson at email@example.com