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Del Missier: Diamond told me to order Libor fixing

(Update) Jerry del Missier, former Barclays chief operating officer, told MPs he believed he was acting on Bank of England's instructions.

 
Del Missier: Diamond told me to order Libor fixing

Barclays' former chief operating officer, Jerry Del Missier, today told MPs that Bob Diamond instructed him to fiddle the banks' Libor rates following a conversation with the Bank of England.

Del Missier, who resigned as chief operating officer earlier this month after Barclays named him as the most senior employee to order the manipulation of Libor rates, told the Treasury Select Committee he believed he was acting on instructions from the Bank of England.

Del Missier said he'd been informed by former chief executive Diamond of a conversation with deputy Bank of England governor Paul Tucker about concerns over Barclays' high Libor rate submissions.

Libor is the average rate banks pay to borrow from one another, and is calculated using rate submissions from 16 banks – a high individual submission suggests other banks are wary about lending to it and might therefore call into question the bank's stability.

Del Missier said that as he understood it the Bank of England was under political pressure from Whitehall regarding the health of Barclays as demonstrated by its Libor rates and that they needed to get rates down. Following a telephone conversation with Diamond about this he said he then passed down an instruction to the head of the bank's money markets desk to lower rates accordingly.

Del Missier told MPs that he would not have passed down this instruction if he'd believed it had come internally and not from the Bank of England.

Diamond, however, told the Treasury Select Committee two weeks ago that he never once believed his conversation with Tucker to be an instruction.

Tucker, meanwhile, also told MPs at his meeting with the committee last week that the conversation was not intended as an instruction, and assured them that no government minister had ever leant on him to encourage Barclays or any other bank to fix their rates.

When asked why Diamond denied giving him the instruction, Del Missier said 'I can only relate what I can recall from the phone conversation that took place, I can't comment on what other people recall'.

But when asked by Conservative MP David Ruffley 'It was an instruction from Diamond wasn't it?' Del Missier replied 'Yes it was an instruction'. 

Meanwhile, when repeatedly pushed by Ruffley on whether manipulating Libor rates is an illegal activity – as stated clearly by the regulator – Del Missier maintained it is not a 'yes or no' matter and said that it didn't seem 'inappropriate' given the circumstances at the time.

He later added that Libor low-balling was perhaps 'improper' in retrospect and that he 'deeply regrets what it has done to tarnish the brand'.

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14 comments so far. Why not have your say?

LouisV-W4

Jul 16, 2012 at 15:59

"...Mr le mesurier... the Committee thinks you've been a very naughty boy. What do you have to say about THAT (intense look into the cameras)?

"well, I don't really recall the exact conversations in any detail, and I don't have any notes, and I feel you are not being very nice to me. After all, I did agree to come and appear contrite"

"Yes, we apologise for our behaviour. I'm sure you must be very busy lining up your next top job in Banking. Just don't do it again!"

Mr le mesurier thinks to himself as he leaves... "Geez... what a bunch of losers!"

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Rustie

Jul 16, 2012 at 18:11

To LouisV-W14:

Reckon that's about right Louis.....and I'd just like to add my bit re: FSA

They're a gang of criminally negligent city boy patsies who deeply deserve 100 lashes each, the sneaking, snivelling bastards.

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White Stick follower

Jul 16, 2012 at 18:21

One is forced to wonder what these big players are really worth. We've seen the Murdochs, now the Barclays 'head honcho's'. No one knows anything if they are to be believed, but we are continually told that 'we need to pay these amounts to get the right people'. As seen before when these big boys face cross examination they are hopeless,even in front of a bunch of amateurs on the Select Committee. Lord knows how they would fare in a Court of Law, under Oath and facing decent counsel.

Putting aside the above we see an endless procession of 'right people' being paid millions, across the board despite the decline in the companies under their control, we see NHS Trust's lobbing out eye-watering salaries to CEO's & etc who lead their Trusts into Administration, then there are the local authorities, Utility company directors- its endless.Make a mess & get mega-bucks!

The constant threat is 'if we don't pay them £xxx'K pounds they will go elsewhere. Let them go and see if anyone will have them

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Ubiqueloco

Jul 16, 2012 at 18:24

Love it Rustie, we mustn't forget that this is the same FSA that refused to even consider that the banks were up to no good re: bancassurance and that the banks were buying them lunch every day with drinkies after work telling them how all the problems were due to the dirty nasty IFA's!!!

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White Stick follower

Jul 16, 2012 at 18:38

Sadly the brave new world of Regulation will be the same lot - with new badges and higher salaries Regulating as before. Nothing will change apart from pay packets. As for policy in Regulation, remember the old adage,"If you don't like the answer, don't ask the question"

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D G Stonebanks

Jul 16, 2012 at 18:59

There was a time when it looked as tho banks were in real trouble with queues outside Northern Rock. Who was next? If a bank was having to pay more to borrow from other banks, then it would indicate that other banks didn't trust it, so why should any other depositor?

At times like that, I reckon that a bit of fiddling to keep the show on the road is justified.

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colin grant

Jul 16, 2012 at 19:12

I havent seen any discussions about what the repayment of all our money to the banks to bail them out is going to be repaid and at what interest rate. I seem to recall Obama stating that he will make sure "they get back every cent".

Whats our lot doing apart from continuing to take huge bonuses while the share price drops? Surely at some point someone from the government will call on the banks to say, "as from next week you are going to pay this amount every week until all the money we lent you has been repaid". Seeing as the banks dont appear to be lending anything to anyone we should be getting our money back while they still have some. After all, how are they making money when they are not lending and getting interest?

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dennis rooke

Jul 16, 2012 at 19:25

Having previously in a different life been Global Head of Money Markets and Deputy Chief Executive Markets Division for Barclays. I would comment as follows no way would the Bank of England have . instructed Bob Diamond to lower the rates he is a strrange fish indeed I think it has more to do with the blatant attempt to avoid potential problems if the government had given them direct help and they wanted to convince a bunch of people from the middle east that the Bank was a good bet and was not paying up which would have raised a few bells!!! M r Diamond and Mr del Missier must have taken out of the Bank over £150 million pounds in pay and bonuses and the shareholders are left with the losses of litigation and fines Thank goodness the Bank of England and the FSA pushed a weak Chairman enthralled by Bob Diamond to take action. In my day 1996 Barclays was a wonderful Bank

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David Rowse

Jul 16, 2012 at 19:35

Colin

Gambling is an addiction and invariably leads to debt and insolvency. Once on the slippery slope it would appear that it is very difficult to retire to 'firmer ground'.

The problem is that banks appear to be gambling with other people's money and when in trouble expect the tax payer to bail them out. I believe that it;s called socialism (i.e using other people's money to help keep you solvent)?

I would so much like to be able to keep just a little more of my small pension on which I paid in excess of £4,000 last year. Perhaps I should threaten to move abroad?

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Galtak

Jul 16, 2012 at 21:15

What a load of sanctimonious rubbish from most our friends above. Are you trying to get yourselves noticed in case Mr Peston decides to step aside. Couldn't help noticing that one of you couldn't even get Mt Del Missier's name right!

Were any of you directly affected by Lehman and/or Bear Stearns. I was. These were difficult times. Am I alone in believing that these guys at Barclays thought they were acting not just in the best interests of their firm but also the global financial system.To my mind Barclays have done not just the shareholders but citizens of the UK a favour by not rolling over and accepting nationalisation.

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dennis rooke

Jul 16, 2012 at 22:40

Galtak, you need to see a shrink to help you over getting fired by Lehman I hope every thing works out for you

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dennis rooke

Jul 16, 2012 at 22:42

Galtak, You cannot talk about spelling name right you you called him MT instead of MR really sorry for you see the shrink twice

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LouisV-W4

Jul 17, 2012 at 08:59

Galtak, clearly humour is lost on you!

You must be the only person to think these people not only did nothing wrong, but were actually trying to help us and not make themselves (Diamond) look good. The Bank was complicit in the corruption by turning a blind eye.

You are not the only person to lose his job. However, with what the likes of Lehman and BS pay, I trust you had been putting something aside for just such a rainy day, rather than spending it on luxury pads, cars, and bubbly at bonus time.

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Hotrod

Jul 17, 2012 at 11:02

The road to hell is paved with good intentions.

In his book "Rogue Trader" Nick Leeson explains in detail just how an insignificant fiddle can escalate into a gigantic web of deceit.

When Barclays, in common with many other large banks, were wrestling with the problems of staying solvent, It has become evident that standards which would normally be acceptable or excusable were ignored.

The question is will those who were directly involved come clean and accept blame. Up until now we have only seen some token gestures. The serious fraud office came late to the party and are only now investigating.

I think the difficulty is going to be how to deal with the scale of the problem. A score of banks, and hundreds of employees are potentially implicated.

Much will depend now on whether ongoing statements are seen as perjury.

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