House FinServ heard Secretary Geithner deliver the second annual FSOC report, but it was principally listening for what actions were taken when Mr. Geithner, when head of the Federal Reserve Bank of New York,  heard initial LIBOR allegations.  While Senior Republicans led the charge, arguing that the Federal Reserve failed to appreciate the prudential implications of manipulation in a rate that sets trillions in U.S. obligations, many Democrats were at least as dissatisfied with Mr. Geithner’s defense – a reiteration that proper referrals were made to the U.K. and that subsequent enforcement actions show how seriously U.S. regulators take the case.  Mr. Geithner was also pressed on replacement benchmark indices, suggesting Congress may seek to play a role in this technical – if increasingly political decision.  This report assesses not only this LIBOR debate, but also the other matters raised at the session, which was most striking in the growing chorus of bipartisan Members demanding big-bank restructurings through break-ups and/or a new Glass-Steagall.  Asked about eminent domain, the Treasury Secretary was careful not to dismiss it out of hand.  Senate Banking next turns to FSOC and, with it, LIBOR, and FedFin will provide clients with an in-depth report on what will surely be at least as skeptical a hearing for the Treasury Secretary.

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