Thu, Jul 05, 2012 - Page 15 News List

Tucker may be called to testify

INTERESTS:British MPs said they might call the Bank of England deputy chief after a Barclays e-mail hinted that Tucker gave the lender the nod to cut its Libor rates


Bank of England (BOE) Deputy Governor Paul Tucker may be asked to give his version of events to lawmakers over a telephone call with former Barclays chief executive Robert Diamond as the Libor furor intensifies.

George Mudie and Andy Love, opposition Labour Party members of the Treasury Committee who were to question Diamond in parliament yesterday, said Tucker should also testify. His name was drawn into the fray after the lender released a note of a 2008 call purporting to show that Tucker, the central bank’s markets director at the time, hinted the firm could cut its Libor rates.

Diamond, Marcus Agius and Jerry Del Missier resigned as Barclays’ top officials after regulators fined the bank a record £290 million (US$454.6 million) for attempting to rig the London interbank offered rate for profit.

An Oct. 30, 2008, e-mail from Diamond, who was then Barclays’ investment banking chief, to John Varley, the bank’s CEO at the time, reads: “Tucker stated that 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.”

“Barclays have [sic] a vested interest in throwing up a smokescreen and it is no surprise to me that allegations have surfaced from Barclays that they were given a nod by Bank of England officials,” Conservative MP David Ruffley said. “Let us see if Mr Diamond is going to put his money where his mouth is. Is he going to be asked about it? Of course he is.”

Ruffley, a former adviser at the UK Treasury, added that if Diamond were to repeat the allegation yesterday, Tucker would have to be asked to testify on the matter.

Tucker “will want to be called before the committee,” Mudie said in an interview. “He is a clear candidate for the governorship of the Bank of England and he won’t want this hanging over him.”

Love, who said the committee would want to speak to Tucker “in particular,” as well as other Bank of England officials “to hear their side of the story,” also called for transcripts of the phone conversation to be published.

A Bank of England spokesman declined to comment. Paul Myners, a Labour Party lawmaker in the upper House of Lords, who was minister for the City, London’s financial district, under the last administration denied he was the source.

“I can say quite categorically I didn’t speak to Paul Tucker or anybody at the Bank of England about the Libor rate-setting process,” Myners told BBC radio’s Today program yesterday. He added that no one else at the Treasury under former chancellor of the exchequer Alistair Darling was responsible either.

“I am absolutely sure Paul Tucker will have a recording of the conversation or he would have had his private secretary listening to the call. Paul Tucker will have his own contemporaneous record of that conversation. The Tories are putting a lot of flak up, trying to take attention away from their role,” Myners said.

Libor, which is determined by 18 banks’ daily estimates of how much it would cost them to borrow from one another for different time frames and in various currencies, is the benchmark for more than US$360 trillion of securities, including mortgages, student loans and swaps.

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