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Bob Diamond to face MPs on Libor scandal

The inquiry scheduled for 2pm could prove explosive as Diamond defends his role and that of Barclays in the scandal

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Bob Diamond is to face a parliamentary inquiry on Wednesday where he is expected to attack Bank of England governors for their part in the Libor interest rate rigging scandal.

A day after resigning as boss of Barclays, Diamond is set to answer questions in a parliamentary inquiry on his role and that of Barclays’s in fixing Libor, the London Interbank Offered Rate, a global benchmark underpinning financial transactions worth an estimated $360 trillion.

Diamond's testimony to a parliamentary inquiry could prove politically explosive. On Tuesday Barclays published a 2008 internal memo from the US investment banker which fellow managers understood to mean that the Bank and government might approve if they manipulated the Libor rate at the height of the banking crisis.

He is scheduled to appear before the cross-party Treasury Select Committee at 2 p.m..

Though his compatriots across the Atlantic will be celebrating a holiday marking their independence from Britain, Diamond said he "looked forward to fulfilling" his appointment with parliament in London, despite having already resigned.

Barclays' defence tactic of claiming official sanction for manipulating a rate at a time of market crisis drew a sceptical response on Tuesday from the man who was chancellor at the time. Former Labour chancellor Alistair Darling said he could not imagine the central bank asking Barclays to take such action and said his department would never "suggest wrongdoing like this".

Britain's third-biggest bank was fined £290 million by US and UK regulators for its role in the alleged manipulation of Libor.

Barclays said in its submission that it was "ironic" that there had been such an intense focus on it alone, because the company had been the first to settle with authorities over Libor in the midst of a global investigation of the banking industry.

Marcus Agius, chairman of Barclays and chairman of the British Bankers Association which sets Libor, quit on Monday.

photo credit: Reuters


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