Barclays former exec testifies on rate-fixing scandal

A former top executive at Barclays who has been blamed for ordering staff to submit false interest rates during the credit crisis in 2008 said he believed his action had been sanctioned by the Bank of England.

Jerry del Missier told the House of Commons Treasury Select Committee that he drew that conclusion from a conversation with the bank’s chief executive, Bob Diamond. He insisted that he believed he had done nothing wrong, and said he would not have given the order if he believed it had not been sanctioned by the Bank of England.

Del Missier resigned as Barclays’ chief operating officer on 3 July, hours after Diamond resigned. Barclays has been fined USD 453 million by US and British agencies for submitting false reports of its interbank borrowing rates, data which goes into the calculation of a key market index, the London interbank offered rate (LIBOR).

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[caption id=“attachment_380016” align=“alignleft” width=“380”]  Diamond said he didn’t believe Tucker had sanctioned false submissions.Reuters[/caption]

In his evidence to the committee on 4 July, Diamond said that del Missier had misunderstood a memo written by Diamond following a conversation with Paul Tucker, a senior figure at the Bank of England regarding Barclays’ LIBOR submissions.

Diamond’s memo said that “that while he (Tucker) 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.”

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Del Missier, however, said his understanding came from a conversation with Diamond a day before the memo was writing. “I only know what I clearly recall from my conversation with Mr Diamond,” he said. Tucker, now a deputy governor of the central bank, has denied giving Barclays any encouragement to submit false rates.

Diamond said he didn’t believe Tucker had sanctioned false submissions, and said he had not given that impression to del Missier. The false rates reported at this time were only part of the investigation. Investigators also found that individual traders at Barclays had persuaded colleagues to submit false rates in the hope of manipulating LIBOR to their advantage.

PTI