Bank of England’s Tucker Denies Barclays Rate-fixing
Bank of England deputy governor Paul Tucker has been blamed by Chancellor George Osborne for the rate-fixing scandal at Barclays to reduce its submissions. However, the economist has repeatedly rejected the accusations, saying he didn’t discuss the interbank lending rate in October 2008 with now Shadow Chancellor of the Exchequer Ed Balls and Baroness Shriti Vadera.
On Monday, the Treasury select committee repeatedly asked Tucker if he was asked by ministers or other officials - specifically Baroness Vadera - about encouraging Barclays to reduce is Libor rate (London Interbank Offered Rate). They referred to a memo from then Barclays chief executive Bob Diamond during the 2008 banking crisis.
Tucker denied having personally leaned on the bank to cut its Libor submissions. He was insistent that ministers didn’t try to influence Libor. He says the memo gave the wrong impression, but he didn’t have a note of the conversation due to the pressures his bank was under at the time.
The questioning follows Barclays being fined £290 million for manipulating Libor, while Diamond resigned from his chief executive post just last week. The committee also asked Tucker why he didn’t do more to respond to concerns about the ‘low-balling’ of the key interest rate at a meeting of market participants in November 2007. When asked if he thought the market was clean following the fine, the deputy governor said that he couldn’t be for sure of anything after finding out about this sewage.
Right away Balls called for Osborne to issue an apology for making completely wrong accusations. It’s clear that the chancellor’s accusations were false and without foundation, and he needs to publicly withdraw them and apologise, he said.