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Diamond: Tucker Libor comments were not an instruction

Bob Diamond TSC 480

Bob Diamond says he did not consider comments from the Bank of England that Barclays’ Libor rate “need not be as high” as an instruction to lower its submissions.

Diamond has also told MPs that he was unaware that when he sent a memo on the BoE’s comments to other senior staff that it was then taken as an instruction.

Yesterday, the Bank of England was dragged into the Libor scandal when Barclays included in its written submission to the TSC a memo which claimed the Bank’s director for financial stability Paul Tucker had told Diamond in 2008 “a number of senior officials in Whitehall” had expressed concerns over the Libor numbers being reported by Barclays.

Giving evidence to the Treasury select committee this afternoon, Diamond was asked by TSC chair to explain a note he sent to other senior staff at the bank which said Tucker had told him Barclays’ Libor returns “did not always need to be as high as we have [seen] recently”.

Diamond said: “I did not take it as an instruction.”

The memo, which was sent to Barclays then chief executive John Varley and chief operating officer Jerry del Missier said: “Mr Tucker stated the levels of calls he was receiving from Whitehall were ‘senior’ and that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently.”

Diamond said that he was not aware that when he sent the memo to Barclays chief operating officer Jerry del Missier it had been taken as an instruction by him to lower rates.

He said: “I was unaware that Jerry had the impression that the conversation I had with Paul, either by note or by conversation, was an instruction and I was not aware that he did instruct.”

He said he thought the note from Tucker indicated concern from the Bank of England that the bank may be having trouble raising funding and could need state assistance.

Asked by Tyrie to comment on the fact that the Libor rate went down days after the conversation suggested in Diamond’s memo, Diamond agreed it had fallen but said the bank’s borrowing rates remained among the highest.

This morning, Tucker asked to appear before the committee at the earliest opportunity to put his side of the story. Alistair Darling who was Chancellor at the time and Ed Balls, who was Education Secretary at the time, but was formerly city minister and close to the then Prime Minister Gordon Brown, have both denied they had anything to do with the calls to the Bank of England.


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There is one comment at the moment, we would love to hear your opinion too.

  1. I get a strong feeling at this guy’s pants are on fire!

    Let me get this straight, he has a conversation with the BOE, doesn’t take it as an instruction but those beneath him do once he has passed the message on….. sounds a little suspect.

    I can see his nose growing now too….

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