The Fed, the LIBOR Scandal, and the Incredible Hulk

Simon Johnson has an interesting column discussing the Fed's response to the rigging of the LIBOR rate. He refers to the memo that Treasury Secretary Timothy Geithner (then the head of the New York Fed) sent to the Bank of England in 2008 and notes evidence that the Fed knew of rigging as early as 2005. Johnson then cites comments from Fed Chairman Ben Bernanke that the Fed couldn't do anything more than it did in calling the Bank of England's attention to the problem.

This is known as the In...