Bank of England governor Mervyn King on Tuesday told MPs that he became aware only two weeks ago that bankers at Barclays had tried to rig the key benchmark Libor interest rate.
"The first I knew of it was when the reports came out two weeks ago," King told a hearing of the Treasury Select Committee made up of cross-party MPs.
King said that although he had shared worries with US Treasury Secretary Timothy Geithner in 2008 over the governance of Libor, there was no evidence at that time of wrong-doing.
The Bank of England on Friday published emails revealing that Geithner had warned about the manipulation of Britain's Libor bank rate in 2008, four years before Barclays was fined for trying to rig it.
"Neither of us had evidence of wrong-doing," King said on Tuesday. Geithner was at the time head of the Federal Reserve Bank of New York.
Libor (London Interbank Offered Rate) is a flagship London instrument used as an interest benchmark throughout the world, while Euribor is the eurozone equivalent.
The rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.
Last month, Barclays was fined £290 million after admitting attempting to manipulate the Libor and Euribor rates between 2005 and 2009.
But analysts said that the true financial cost could be far higher as the scandal may trigger criminal prosecutions and implicate other banks.
A senior official from Britain's financial regulator the Financial Services Authority told the committee on Monday that they were investigating another seven financial institutions over the issue.
The affair has already cost the jobs of Barclays bosses, including the bank's chief executive Bob Diamond.
Another top Barclays executive who quit over the scandal told British lawmakers on Monday that he had been instructed by his former boss Diamond to manipulate the inter-bank lending rates.
Former chief operating officer Jerry del Missier rejected an earlier suggestion by Diamond that he had mis-interpreted a phone conversation between Diamond and Bank of England deputy governor Paul Tucker in October 2008.
The scandal has also claimed the job of Barclays chairman Marcus Agius and rocked the City of London, one of the world's top financial hubs.
King on Tuesday accused the Barclays board of sailing "close to the wind" too often and that the bank had been in a "state of denial" over regulatory concerns.
The BoE chief added that he had informed Agius of how Diamond had lost the confidence of regulators.
There were "genuine and deep" concerns over Barclays even before the scandal broke, King insisted.
"Barclays was once a great bank. It has to create a new bank with a new culture," he added.