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Bank reveals key phone call details
A phone call between Barclays boss Bob Diamond and the Bank of England ultimately led to some of the rate-rigging actions at the heart of the ongoing banking scandal, the bank has said.
Jerry Del Missier, who was president of investment arm Barclays Capital at the time, told staff to lower the key interbank lending rate after misunderstanding Mr Diamond's account of the conversation with the BoE deputy governor Paul Tucker. The details of the conversation were disclosed in documents submitted to the Treasury Select Committee ahead of Mr Diamond's appearance before MPs on Wednesday.
The submission was released after Mr Diamond and Mr del Missier stepped down with immediate effect following increased pressure from politicians, shareholders and former Barclays directors in the wake of the scandal.
Barclays has submitted a copy of Mr Diamond's note, sent on October 30 2008 to Mr del Missier, and then chief executive John Varley, on his conversation with Paul Tucker, to the Select Committee.
Mr Diamond said Mr Tucker had flagged concerns from senior figures in Whitehall over why Barclays was always towards the top end of Libor pricing. Mr Diamond wrote: "His (Mr Tucker's) response was 'you have to pay what you have to pay'."
Mr Diamond said he asked Mr Tucker to explain to his Whitehall contacts that other banks were providing Libor quotes that did not represent real transactions. The American banker then said Mr Tucker told him the bank's Libor rate did not "always" need to appear as high as it had recently.
Barclays went on: "Subsequent to the call, Bob Diamond relayed the contents of the conversation to Jerry del Missier. Bob Diamond did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier.
"However, Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect to the submitters."
Barclays said there was no allegation by the authorities that this instruction was intended to manipulate the ultimate rate and the bank's submissions had consistently been excluded from the final Libor calculation. The FSA investigated Jerry del Missier personally in relation to these events and closed the investigation without taking any enforcement action, Barclays added.
Meanwhile, it emerged MPs will vote on Thursday whether to set up a Leveson-style inquiry on banking. The Commons will decide whether to endorse David Cameron's plan for a committee of peers and MPs to investigate the issue or opt for the full judge-led investigation demanded by Labour leader Ed Miliband.