Bob Diamond to face MPs over Barclays Libor fixing
Bob Diamond, the outgoing chief executive of Barclays will appear before a Treasury Select Committee (TSC) today to face questions over Barclays involvement in the Libor interbank rate-rigging scandal.
His appearance could be explosive as he has now resigned and will not be answering questions whilst trying to cling onto his job.
His testimony could be explosive as he will be asked about what he believes the regulators, including the Bank of England and senior government and Whitehall figures knew about Libor manipulation.
This follows Barclays’ publishing of an internal memo, written by Mr Diamond, detailing a telephone call he received from the Deputy Governor of the Bank of England, Paul Tucker.
The memo said: "Further to our last call, Mr Tucker reiterated that he had received calls from a number of senior figures within Whitehall to question why Barclays was always toward the top end of the Libor pricing. His response was “you have to pay what you have to pay.”
“I asked if he could relay the reality, that not all banks were providing quotes at the levels that represented real transactions, his response “oh, that would be worse.
"Mr Tucker stated the levels of calls he was receiving from Whitehall were senior and that, while he was certain that we did not need advice, that it did not always need to be the case that we appeared as high as we have recently."
Mr Diamond is said to be furious that he was pressurized into resigning following unconfirmed telephone calls from the UK’s top two financial regulators, Sir Mervyn King and Lord Turner to Barclays chairman Marcus Agius telling him that Mr Diamond has to go.
Mr Diamond believes that Barclays and himself have been made a scapegoat for the Libor scandal that involves other banks and senior bankers and that the authorities were aware of at the time.
Today’s TSC hearing gives Mr Diamond an opportunity to say exactly what he knows and take revenge if he chooses.
Barclays says that it did not conclude that the communication from Mr Tucker was an instruction to change its Libor rates submission. However, in a subsequent conversation on the subject between Mr Diamond and chief operating officer and co-founder of Barclays Capital, Jerry del Missier, Barclays said: “Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect to the [traders]."
It is not clear who the “senior Whitehall figures” mentioned in Mr Tucker’s phone call were but the Chancellor at the time, Alistair Darling denied on Channel 4 News last night that it was him or anyone else who worked in the Treasury at the time.
However, former Labour minister, Baroness Vadera of Holland Park, who was not working in the Treasury at the time, issued a statement last night saying she “has no recollection of speaking to Paul Tucker or anyone else at the Bank of England about the price setting of Libor".
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