Bank of England Executive denies pressuring Barclays

PTI London | Updated on March 12, 2018 Published on July 10, 2012

A senior Bank of England official, today denied that he had given any hint to Barclays that it should manipulate reports of its borrowing costs.

Mr Paul Tucker, the Bank of England’s Deputy Governor, also told UK lawmakers on the House of Commons Treasury Committee that no one in government had leaned on him to put pressure on Barclays to “lowball” its reporting.

Barclays has been fined $ 453 million by US and British agencies for feeding false data which went into calculations of the London Interbank Offered Rate (LIBOR), a key market index which influences the costs of a wide range of financial instruments, including home mortgages.

Mr Tucker’s testimony was significant in shedding further light on the rate-fixing scandal which shocked the financial world and because it was Mr Tucker’s chance to give his version of a conversation with former Barclays CEO, Mr Bob Diamond, on October 29, 2008.

Any hint that Mr Tucker encouraged any false reporting, the conclusion which some people drew from Mr Diamond’s version, could fatally undermine the Bank official’s position as a leading candidate to succeed Mr Mervyn King as Governor next year.

As part of his evidence to committee last week, Mr Diamond produced a memo saying Mr Tucker had told him in a phone conversation “that while he was certain we (Barclays) did not need advice, which it did not always need to be the case that we appeared as high as we have recently.”

Mr Tucker said, Mr Diamond’s account of events gave the wrong impression and that his conversation with the Barclays Chief was “something along the lines of, ‘Are you insuring that you, the senior management of Barclays are following the day-to-day operations of your money market desk, your treasury; are you insuring that they don’t march you over the cliff inadvertently by giving signals that you need to pay up for funds.’”

Unlike Mr Diamond, Mr Tucker said he had not made a note of the conversation at the time. “There were too many conversations, there were too many things going on,” Mr Tucker said.

In the wake of the fines, Mr Diamond resigned and the Barclays Chairman, Mr Marcus Agius announced that he would leave as soon as his successor was chosen.

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Published on July 10, 2012
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