In his testimony today before House FinServ, Mr. Bernanke took a lot of questioning on the LIBOR and Basel III along with the usual critique Rep. Paul (R-TX) and others have lobbed of late at the central bank. Responding to an array of questions on LIBOR, Mr. Bernanke did not discourage possible criminal prosecution, although he said it is too early to know if any inter-bank collusion occurred. He also reiterated suggestions (see Client Report REFORM88) about substitute rates. As in the past, Mr. Bernanke defended the pending Basel III proposal (see FSM Reports CAPITAL185-187), but did hold out a bit of hope to those in the industry who hope for an extension of the early-September comment deadline. This report assesses Mr. Bernanke’s views and Committee questioning.
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