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King: first I knew about Libor fixing was after Barclays' fine

Bank of England governor Mervyn King says Barclays 'sailed too close to the wind' and its board was in denial over the regulator's concerns.

 

King said he also had a conversation with Barclays' chairman and senior independent director to ensure they were aware of the depths of the regulator's concerns as he felt 'the board of Barclays had been in something of a state of denial'.

Turner, meanwhile, said that while he did not give a regulatory instruction for Diamond to resign, he too had a conversation with Agius in which he made it clear that he should think very carefully about whether Diamond was the right person to lead the substantial change needed in the bank's culture and if the markets and the 'external world' would have confidence in him.

Andrew Tyrie, chairman of the Treasury Select Committee, however, has said regulators should not be able to bring such 'arbitrary pressure to bear on the boards of private companies'. 'It appears that governance checks need bolstering,' he said.

King is the latest figure of authority to appear before the Treasury Select Committee to answer questions on the Libor fixing scandal. Diamond, Agius, recently resigned Barclays executive Jerry Del Missier, deputy Bank of England governor Paul Tucker and FSA officials have all given testimony in the past two weeks.

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13 comments so far. Why not have your say?

vin gos

Jul 18, 2012 at 07:38

Reminds me of faulty towers, Emmanuel saying "I know nothing",It seems no one is incharge of banks.what an extraordinary state of affair,

but bonuses galore.

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Gonk

Jul 18, 2012 at 08:22

It is all very well for King to say that "the British Bankers Assn needs a nudge in the right direction", but Agius is chairman of that as well as Barclays Bank!

This whole industry has been tainted by a combination of massive economic incompetence by the last Labour Government and a handful of spivs in banking - it seems in Barclays in particular - dragging down the honest and sound majority in the sector.

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SMS

Jul 18, 2012 at 08:41

Another top over paid British senior manager who didn't know what was going on. What do these people think they are paid to do?

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John Pickford

Jul 18, 2012 at 08:49

We know nothing ?, pull the other one.

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Gordon Watson

Jul 18, 2012 at 09:03

It really is not satisfactory for the Governor of the Bank of England to admit he did not know the extent of the Barclay problem and claim he did not need to because he was not the Regulator. Previous Governors were never slow to "invite" senior bankers to their office for a "chat" so that the bankers were fully aware they were operating on or outside their acceptable remit and that if necessary action would be taken!

As far as Lord Turner is concerned his was a Political Appointment and the Governor should have been monitoring him.

I do hope Mervyn King's replacement comes from somewhere other than the Bank of England or the FSA and is a knowledgeable and fearless expert on banking.

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derek farman

Jul 18, 2012 at 09:11

Any of the spivs who may be found guilty of fraudulently rigging Libor should be personally fined, and very heavily. Also their bonuses and pensions should be stripped from them.

My guess is that it is not the overall culture of our banks which is necessarily at fault . It is the aggressive, domineering, fear provoking, greedy, individuals who sometimes fight their way to the top, and pervert the whole culture of their organisations.

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MoneyObserver

Jul 18, 2012 at 09:29

Angela Knight, CEO British Bankers Association was extraordinarily evasive in a TV interview when this story first broke, suggesting that the responsibilty for fixing of LIBOR had NOTHING to do with the BBA.

Paxman had to point out it is called the BBA LIBOR.

Why is she not in front of the MPs committee ?

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Enrico

Jul 18, 2012 at 09:31

I cannot believe the drivel that has left Kings mouth when he comes out with comments as per below:-

'Concerns about what Libor meant is a million miles away from deliberate, deceitful manipulation of submissions in order to make financial gain,' he said. 'That's my definition of fraud.'

My definition of fraud in this case is Libor was fixed deliberately,it was a deceitful manipulation of submissions in order to make financial gain.

Barclays changed the Libor figures to benefit.If thats not fraud I don`t know what is.

Yet another banker trying to cover up his buddies.

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RL

Jul 18, 2012 at 10:21

The Bank of England is always manipulating interest rates, that's their job.

Gonk, you miss the point. The BoE was no longer regulating the banks, that was the FSA's job. That's one of the reasons the last Government has significant responsibility for this mess and why the regulatory system is being changed and the FSA broken up.

That said it's remarkable that no one knew anything. After all the investigation into LIBOR fixing was widely reported some time ago (18 months?).Even I had noticed that! Why didn't Diamond or King dig further.. heads deliberately in the sand?

One unanwered question. If Barclays was systemically underreporting LIBOR why did the Governor through Tucker still think Barclays rates were high in October 2008? Something doesn't add up.

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Anonymous 1 needed this 'off the record'

Jul 18, 2012 at 10:45

Can someone explain what this news release means for Santander depositors?

Santander UK has repurchased bonds worth 2.375bn euros from holding company Banco Santander, Spanish daily Expansion reports.

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Anthony Tinslay

Jul 18, 2012 at 14:20

Anonymous 1 - Santander's action means nothing for their UK depositors. The Bonds were just a form of loan from the parent Bank to the UK subsidiary at a time when funds were needed for UK operations. Subsequent positive cash flow in the UK has enabled the bonds to be repaid/retired.

As far as King and Turner are concerned all they have really done is to acknowledge that Diamond/Barclays is the agreed fall guy and they can merely say we knew nothing and cover their backs. That action of course merely shows them both to be incompetant in their jobs and the basic responsibility lies with the Labour Government in setting up the tri-partitte form of supervision that allowed irregular behaviour to continue unchecked for so long in so many institutions, i.e. nobody was really in control!!

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MoneyObserver

Jul 19, 2012 at 09:53

King/Turner - after Diamond, theirs is yet another example of the skillfully employed "Murdoch Defence" (I wasn't made aware by others) - a strategy becoming increasingly popular with top people who are handsomely paid to ensure things go correctly but fail.

Perhaps someone could employ this defence retrospectively to demonstrate

the Titanic disaster had nohing to do with the Captain - actual phrases used by 'top failures' in the last 6 months could be used with the minimal adaption.

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Graham Barlow

Jul 23, 2012 at 14:05

Behind all of this denial is a monumental Political scandal which is too big for any of them to admit they were anywhere near it at the time. One after the other are all denying they knew anything, yet they were directly involved and PAID to do the jobs of surveilance in Banking. I believe they were leant on by faceless Politicians, and are too scared to Blow the whistle. in case the whole pack of cards comes down taking their Pensions with it.

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