BoE in almost daily contact with Barclays in 2008 over Libor, emails reveal
Deputy BoE governor Paul Tucker was set to face a parliamentary inquiry into the rate-rigging scandal on Monday
By CFOWorld staff | CFO UK | Published 16:33, 09 July 12
Newly released emails reveal the Bank of England had almost daily contact with Barclays in October 2008 over Libor with its deputy governor contacting Barclays ex-boss Bob Diamond several times.
An email showed on Monday that one occasion deputy Bank governor Paul Tucker directly remarked on the high level of the price of a bond to Diamond.
"Struck that your govt gnteed bond was issued at around 140 over gilts," the subject line of an email sent by Tucker to Diamond on October 26, 2008 said.
"That's a lot," the body of the text said.
Tucker, who is tipped to be the next Bank governor, on Monday faced the parliamentary inquiry into the rate-rigging scandal that has already cost Diamond and several other senior executives their jobs at the bank.
Tucker was to appear before MPs examining Barclays and other banks suspected of manipulating Libor, the interbank lending rate that underpins trillions of dollars of contracts around the globe at 1530 GMT.
Earlier this month, Barclays was fined a record £290 million by US and UK regulators for conspiring to rig Libor rates between 2005 and 2009, plunging the bank into crisis and triggering a brawl between politicians over who was to blame.
Brussels also stepped up its involvement in the probe and said it intends to propose new rules that would criminalise the manipulation of indexes such as Libor.
"We need to draw lessons from the Libor case," said a spokesman for Michel Barnier, the EU Commissioner in charge of financial regulation. "We intend to close the regulatory gap in our proposed market abuse legislation by including the direct manipulation of market indexes such as Libor."
The BoE's Tucker asked to appear before the lawmakers' panel to clarify his position after questions over his role in the scandal. Barclays is among more than a dozen global banks under investigation by authorities in US, Europe and Japan, but the only one so far to admit wrongdoing.
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