LONDON (AP) — U.K. lawmakers are set Monday to question Paul Tucker, a senior Bank of England official, about his contacts with Barclays during a time when the bank has admitted it was manipulating its borrowing costs.
Barclays has been fined $453 million by U.S. 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.
In the wake of the fines, Chief Executive Bob Diamond resigned and Barclays Chairman Marcus Agius announced that he would go as soon as his successor was chosen.
Diamond last week gave his version of a conversation with Tucker, now the deputy governor of the Bank of England, about why Barclays’ was quoting higher rates than other banks. Diamond’s version raised questions about whether Tucker had in any way encouraged Barclays to cheat on its rate submissions.
Email traffic disclosed by the Bank shows that it was concerned about Barclays’ rates. Two of those e-mails were between Tucker and Jeremy Heywood, then the senior civil servant in then-Prime Minister Gordon Brown’s office.
In an email on Oct 22, 2008, Heywood spoke of Barclays’ high rates, and added that there was “a lot of speculation in the market over what they are up to.”
“I know. But I don’t think that can be all of it,” Tucker responded. “Cos I don’t think they’d be an influence on euro LIBOR, which has also been stick. But we are trying to monitor what’s going on.”
Tucker at the time was the Bank of England’s executive director for markets. He was appointed deputy governor in 2009, and is one of the leading candidates to succeed Governor Mervyn King when he steps down next year.
Seven days after the Tucker-Heywood exchange, Diamond had a telephone conversation with Tucker.
A note recorded by Diamond, which was submitted to the House of Commons Treasury Committee last week, said Tucker initiated the call, saying senior government officials were wondering why Barclays was reporting higher borrowing rates than other banks.
The implication, which also worried Barclays, was that this could be interpreted as a sign that Barclays was in financial difficulty and having trouble borrowing from other banks.
“I asked if he could relay the reality, that not all banks were providing quotes at the levels that represented real transaction,” Diamond recorded in a memo after the call. “His response was ‘Oh, that would be worse.’”
Diamond added that Tucker told him “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 he later discussed the conversation with Jerry del Missier, who was a senior manager of Barclays Capital.
“Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep LIBORs so high. He passed down an instruction to that effect to the submitters,” Diamond said. Del Missier resigned the same day as Diamond.
Barclays has said that individual traders — Diamond said it was 14 — sought to manipulate the LIBOR to protect their own positions at various times between 2005 and 2009. The bank has admitted that it also submitted false lower rates at times in 2007 and 2008 to discourage speculation that it was in trouble and thus had to pay more to borrow money from other banks.
More Related Stories
- 51 killed in massive Oklahoma tornado
- Don't cry climate-change wolf
- Record tornado devastates Oklahoma
- Limbaugh: No one willing to impeach the first black president
- Tornado reduces Oklahoma City suburb to rubble
- AP: Toll at least 37 dead in Okla. tornado
- Entire Midwest on tornado warning
- Oregon senator proposes appeal to Monsanto Protection Act
- Supreme Court to rule on prayer at government meetings
- Beltway scandal machine breaks, knows nothing about America
- Gitmo hunger striker launches Twitter campaign
- "Hero" cop, honored by Obama, accused of double rape
- Father of gay high school student arrested for dating classmate speaks out
- Pentagon adviser pushed Anthrax drug, which his firm produced
- Conservatives A-OK with closeted Boy Scouts
- The new geography of poverty
- Promotion for NYPD cop who cost city $1.5m in settlements
- Obama to all-male university graduates: Be the best husband to "your boyfriend or partner"
- The truth in Kanye's anti-prison rap
- GOP attorney general candidate tried to force women to report miscarriages to police
- Chinese hackers resume attacks against U.S.
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11