Differences of opinion

As the fallout of from the LIBOR fixing scandal continues Paul Tucker, deputy governor of the Bank of England has directly contradicted the earlier evidence of Bob Diamond.

In his evidence it was reported that Tucker “hit back at former Barclays chief executive, Bob Diamond, saying his evidence to MPs over the Libor rigging scandal was wrong and inaccurate. Giving an account of the call that led one of Barclays’ most senior managers to order the bank to lower its Libor submissions, Mr Tucker said Mr Diamond’s version of their conversation was ‘not completely’ accurate”.

The report goes on to note how “Tucker told MPs he had never suggested to Mr Diamond that Barclays’ Libor submissions were too high. Instead, he said he had been referring to concerns about the bank’s money markets desk, which is responsible for the short-term funding of the lender. Of the last sentence of Mr Diamond’s crucial October 2008 memo, he said: ‘It should have said something along the lines of, are you ensuring that you, the senior management of Barclays, are following the day-to-day operations of your money market desk, your treasury? Are you ensuring that they don’t march you over the cliff inadvertently by giving signals that you need to pay up for funds.'” The report mentions that “It came as Mr Tucker confirmed that one of the “senior Whitehall figures” referred to in Mr Diamond’s now infamous memo was Sir Jeremy Heywood, who at the time was principal private secretary to Labour Prime Minister Gordon Brown”. Heywood is now Secretary to the Cabinet, the highest civil servant in the UK.

The report goes on to mention that “Tucker denied categorically there had been pressure from either the Bank of England or any government ministers for Barclays, or other lenders, to lower their Libor submissions”. This does not help George Osborne, who in an interview recently with The Spectator implied that Ed Balls had a role to play in the scandal during his time under Gordon Brown. Other articles have noted the extent of emails between senior government officials and Barclays.

Separate reportshave mentioned that “Like Diamond, Tucker repeatedly insisted he was ‘not aware’ Libor was being rigged until last month. He said the revelations had come as a ‘deep shock.’ In fact, he said: ‘Such collusion would never have occurred to me until the revelations of the last few weeks.’ What’s more he insisted it wasn’t the Bank’s business to have more knowledge. ‘We didn’t see ourselves as being responsible for its effectiveness whatsoever,’ he said”.

Bob Diamond has in response to Tucker’s evidence said that  “Diamond has branded as ‘terribly unfair’ and ‘unfounded’ claims that he misled MPs over Libor rigging as the former Barclays chief tried to rescue his reputation by dropping claims for bonuses worth up to £20m. In a letter to Andrew Tyrie, the chairman of the Treasury Select Committee, Mr Diamond said he was ‘dismayed’ by suggestions that he had lied while giving evidence. The former bank chief resigned last Tuesday over his part in the scandal. ‘Having watched the Committee’s session today, I was dismayed that you and some of your fellow Committee members appear to have suggested that I was less than candid last week,’ wrote Mr Diamond. ‘The comments… have had a terribly unfair impact upon my reputation.'” The report adds that “The letter was released hours after Mr Diamond dropped a claim to bonuses worth as much as £20m as part of a settlement with Barclays. He will receive £2m in salary and pension contributions over the next year as part of the deal, but gave up his right to further shares and options”. This gesture of Diamond’s though welcome will not see him starve, but may help him gain a shred of credibility.

Giving his own evidence the chairman of Barclays, Marcus Agius who when “Asked about the validity of Mr Diamond’s evidence, Mr Agius answered 11 questions with a simple but damning phrase: ‘I cannot speak to Mr Diamond’s testimony.’ The politicians dealing with the Libor rigging scandal took little time to draw conclusions. ‘Mr Diamond has been misleading this Committee,’ said outraged Labour MP John Mann in a session which focused more on what Mr Diamond had not told the MPs and less on the specifics of the scandal”. In addition to this but surely to be expected are reports that the bank was aggressive with regulators, a posture that should under no circumstances be tolerated.

This is surely just the beginning of what promises to be a long summer of scandals.

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2 Responses to “Differences of opinion”

  1. Ignoring the evidence « Order and Tradition Says:

    […] do not want to take senior positions in an industry that has destroyed its own reputation, and continues to do so. Like this:LikeBe the first to like […]

  2. Asleep at the wheel « Order and Tradition Says:

    […] more revelations from the LIBOR scandal flow […]

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