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04/07/2012
Ex-Barclays Boss To Face MP's' Questioning
One day after resigning as chief executive of Barclays, Bob Diamond is to be grilled by MPs in the wake of the inter-bank interest rate-fixing scandal.
His appearance was arranged before the latest furore, but he is likely to be quizzed about who knew what and when.
Following suggestions that the Bank of England's deputy governor and senior Whitehall officials knew rates were manipulated, MPs are expected to also ask about the role of the BoE and the previous government in the rate-fixing.
Amid reports that Mr Diamond was pressured to resign, there is speculation that he will use the Treasury Committee hearing to hit back at senior political and City personnel.
On Tuesday, Barclays released Mr Diamond's note of a conversation in 2008 with the Bank of England's Paul Tucker.
Mr Diamond writes that Mr Tucker told him of concerns among "senior figures within Whitehall" about why Barclays was setting its Libor rate - the rate at which banks lend to one another - at the "top end".
He went on: "Mr Tucker stated the levels of calls he was receiving from Whitehall were senior and that, while he was certain that we did not need advice, that it did not always need to be the case that we appeared as high as we have recently."
Subsequently, the Libor borrowing rates submitted by Barclays fell, potentially understating the extent of the bank's borrowing costs.
This manipulation of Libor took place in 2008, around the time Barclays was raising funds privately in the Middle East - rather than taking emergency loans from the government like a number of other major UK banks - following the credit crunch and the onset of the financial crisis.
Barclays is also being investigated for manipulating Libor rates to increase profits as far back as 2005.
Mr Diamond's resignation came less than a week after Barclays was fined £290m for its role in Libor manipulation.
(H/GK)
His appearance was arranged before the latest furore, but he is likely to be quizzed about who knew what and when.
Following suggestions that the Bank of England's deputy governor and senior Whitehall officials knew rates were manipulated, MPs are expected to also ask about the role of the BoE and the previous government in the rate-fixing.
Amid reports that Mr Diamond was pressured to resign, there is speculation that he will use the Treasury Committee hearing to hit back at senior political and City personnel.
On Tuesday, Barclays released Mr Diamond's note of a conversation in 2008 with the Bank of England's Paul Tucker.
Mr Diamond writes that Mr Tucker told him of concerns among "senior figures within Whitehall" about why Barclays was setting its Libor rate - the rate at which banks lend to one another - at the "top end".
He went on: "Mr Tucker stated the levels of calls he was receiving from Whitehall were senior and that, while he was certain that we did not need advice, that it did not always need to be the case that we appeared as high as we have recently."
Subsequently, the Libor borrowing rates submitted by Barclays fell, potentially understating the extent of the bank's borrowing costs.
This manipulation of Libor took place in 2008, around the time Barclays was raising funds privately in the Middle East - rather than taking emergency loans from the government like a number of other major UK banks - following the credit crunch and the onset of the financial crisis.
Barclays is also being investigated for manipulating Libor rates to increase profits as far back as 2005.
Mr Diamond's resignation came less than a week after Barclays was fined £290m for its role in Libor manipulation.
(H/GK)
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Barclays Boss Bob Diamond Resigns
Barclays chief executive Bob Diamond has stepped down with immediate effect. The move follows the bank receiving a £290m ($450m) record fine by US and UK regulators for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions.
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Barclays chief executive Bob Diamond has stepped down with immediate effect. The move follows the bank receiving a £290m ($450m) record fine by US and UK regulators for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions.
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