US Treasury Secretary Timothy Geithner has said that he had warned UK authorities about problems with the Libor inter-bank lending rate in 2008.
He told US politicians he had emailed the Bank of England with suggestions on how to solve these issues.
He went on to question whether the British Bankers’ Association (BBA), which oversaw the setting of Libor, was the right body for the job.
Concerns about Libor’s reliability had also been in the public domain in 2008.
The process banks use to set the benchmark rate at which they lend to each other was discredited following an investigation into Barclays that led to a £290m fine.
There is widespread belief that other banks were also involved in manipulating Libor, which is one of the most important interest rates and is used as the basis for pricing a range of loans and investments.
In testimony to the US House of Representatives, Mr Geithner, who was head of the New York Federal Reserve Bank at the time problems with the Libor rate surfaced in the US, said the BBA, which is a private body, was not strong enough to oversee the setting of Libor.
He likened the BBA to a police force in a small town where the population had multiplied 10 or 100-fold. When that happened, he said, you had to increase the size of the police department.
He said he had acted promptly to alert US authorities and the Bank of England: “In the detailed recommendations we gave to the British, we identified a series of specific things that would make it untenable for this rate to be affected by the banks’ incentive to lower their reported cost of funds.
Read more: BBC