The Libor is set based on reported borrowing rates from 18 of the world's largest banks, including three U.S. institutions. Documents released by the New York Fed revealed earlier this month that officials at the British bank Barclays first admitted to reporting false rates in 2007, and Geithner said he became aware of the issue in 2008.
Barclays paid $451 million in fines to regulators earlier this month to settle manipulation charges, and regulators are exploring whether other banks also worked to rig the rate, as Barclays has alleged. Meanwhile, some lawmakers are questioning why the issue came to light now, years after concerns were first aired.
"You were aware of this in early 2008, and for the last four years, you never used the bully pulpit that you had to warn the American people," said Sen. Pat Toomey (R-Pa.). "Why did you not use the enormous influence that you had had?"
Sen. Richard Shelby (R-Ala.) wondered why Geithner did not inform the attorney general about potential fraudulent activity, instead referring the matter to other financial regulators.
"Did you think this was a big deal?" he asked.
And Sen. David Vitter (R-La.) took issue with the fact that it is still not known whether the U.S. institutions participating in Libor-setting — Bank of America, Citigroup and JPMorgan — also submitted false rates.
"We haven't gotten to the bottom of it four and a half years later," he said. "Doesn’t that unequivocally suggest that someone dropped the ball?"
For his part, Geithner held his ground, depicting his response and that of the New York Fed as proactive and appropriate. After learning of the matter, Geithner and the bank referred it to U.S. and U.K. regulators.
"I absolutely thought this was a problem, which is why I took the initiative to do the things we did," he said.
Democrats, as they had in the House, largely rallied around Geithner, and said any blame should first go other places before falling to him.
Sen. Mark Warner (D-Va.) described Geithner as "the only guy that actually sounded the alarm and said we should be looking at this."
"I'm puzzled by repeated claims that you and regulators stood by and did nothing," added Sen. Charles Schumer (D-N.Y.). "You and the New York Fed were proactive."
Geithner also suggested Thursday that regulators need to find a way to inform each other of potential threats to the financial system that are discovered during confidential investigations in a way that does not jeopardize the probe. That way, regulators can work to shore up that weakness while still holding wrongdoers accountable.
"I think we have to find a way to make that information, if it has systemic implications, available to key members," he said.
He also added that officials were looking into Libor alternatives as a benchmark rate, and also examining similar rates for similar manipulation problems.