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By Caroline Salas Gage – Jul 17, 2012 4:47 PM ET

Chairman Ben S. Bernanke defended the Federal Reserve’s response to manipulation of theLondon interbank offered rate, saying the Fed cooperated with other regulators and suggested a fix.

“The investigations took place, but they were taken up quite quickly by not the Fed, which is a safety and soundness regulator, but by the authorities that had the most direct responsibility for those issues,” Bernanke said in testimony today to the Senate Banking Committee inWashington. The Federal Reserve Bank of New York “took the lead” and “informed all the relevant authorities” in the U.K and U.S.

Regulators in both countries have defended their reaction to the manipulation of Libor, the global benchmark for $500 trillion of securities, after Barclays Plc (BARC) was fined a record 290 million pounds ($453 million) for rigging borrowing costs.

The New York Fed last week released documents showing it knew Barclays underreported rates and that Timothy F. Geithner, then the president of the regional Fed bank, sent a memo in June 2008 to Bank of England Governor Mervyn King recommending changes to how Libor was calculated.

“What you come away with is ‘Look, we turned it over to the responsible people in Europe – we did our job,’” said Robert Eisenbeis, chief monetary economist at Cumberland Advisors in Sarasota, Florida. While Fed officials “could have done more,” they are making it “pretty clear that this is the Brits’ problem.”

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