You are here: Home - Investing -

Tucker denies knowledge of LIBOR ‘cesspit’

Written by:
Bank of England deputy governor Paul Tucker has denied being asked by government officials to encourage banks to lower LIBOR submissions at the height of the crisis in 2008.

Addressing the Treasury Select Committee yesterday, Tucker (pictured) said a note made by former Barclays CEO of a conversation he had with the deputy governor on 29 October 2008 gave “the wrong impression” in parts.

Tucker said “absolutely no” government minister or official had suggested he lean on Barclays to lower its submissions in 2008. The note was released by Barclays last week amid a political storm over the bank’s manipulation of LIBOR rates.

According to the deputy governor, the conversation centred on his concerns over Barclays’ funding position, and its apparent willingness to pay higher rates of interest in the money markets, rather than its LIBOR submissions.

“[The note] should have said something along the lines of: ‘Are you ensuring that you, the senior management of Barclays, are following the day-to-day operations of your money market desk, your Treasury, are you ensuring that they don’t march you over the cliff inadvertently by giving signals that you need to pay up for funds?'”

He added he had no knowledge of banks colluding to lower LIBOR until the revelations of recent weeks, despite concerns being flagged to the Bank in 2007.

“This was a cesspit [but] we were not aware of it, other than what is starting to come out in these investigations. We didn’t have any knowledge, I didn’t have any knowledge.”

Tucker suggested he viewed these concerns over artificially lower rates as signs of a market that was “dysfunctional and illiquid” rather than one characterised by dishonesty.

Barclays chairman Marcus Agius, now leading the search for Diamond’s successor following his resignation last week, will face the committee at 10:00 this morning.

Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Loans for the elderly: Govt to outline residential care plans

The government is to announce details of a deferred payment scheme for residential care for the elderly, which will allow...