NY Fed told of interest rate manipulation in '07 - WQOW TV: Eau Claire, WI NEWS18 News, Weather, and Sports

WASHINGTON (AP) -- The Federal Reserve Bank of New York released documents Friday that show it learned five years ago of big banks understating their borrowing costs to manipulate a key interest rate.

A congressional panel requested the documents and is investigating manipulation of the London interbank offered rate, which affects what people pay for loans.

The documents show correspondence from Britain's Barclays bank to the New York Fed in 2007 indicated some major banks could be trying to rig the rate. In 2008, an employee of Britain's Barclays told the New York Fed the bank had underreported its borrowing costs to keep the key interest rate low. The employee said other banks had done the same.