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 kristina.peterson@dowjones.com