The Washington Post reports that the Bank of England was warned by Timothy Geithner (then President of the Federal reserve bank of New York) in 2008 that Libor needed to be fixed:
"While president of the Federal Reserve Bank of New York, Timothy F. Geithner pressed British regulators to reform the way a critical global benchmark called the London interbank offered rate, or Libor, is calculated, according to a June 1, 2008, e-mail obtained by The Washington Post.Here is a link to a copy of the email and the Bak of England's response: Geithner email.
Writing to the head of the Bank of England, among others, Geithner made six recommendations, which included eliminating incentives that could encourage banks to manipulate the rate and establishing a “credible reporting procedure.”'We would welcome a chance to discuss these and would be grateful if you would give us some sense of what changes are possible,' Geithner wrote."
The New York Fed is set to release a treasure trove of documents Friday morning (EST) detailing its response to concerns raised as early as 2007 about Libor, which helps set the standard for $10 trillion worth of corporate bonds, credit cards, mortgages and other loans around the world.
The storm is coming, the Bank of England and others had best batten down the hatches!