Barclays chief told executive to cut Libor, MPs told
FORMER SENIOR Barclays executive Gerry Del Missier, who was forced to quit over the interest-rate rigging scandal, yesterday told British MPs he had received clear instructions from the bank’s chief executive, Bob Diamond, to cut the Libor borrowing rate.
Last week, Mr Diamond, another bank casualty over the Libor scandal, insisted he did not believe he had instructed Mr Del Missier, on foot of an October 2008 conversation he had with senior Bank of England official Paul Tucker.
However, Des Missier, who was then a senior executive in Barclays’ investment banking arm, Barclays Capital, was under no doubt he had been given an order, when he gave evidence yesterday to the House of Commons’ Treasury Select Committee.
“It was an instruction,” he told the Conservative chairman of the committee, Andrew Tyrie, adding that he had “passed it on to” Barclays money market desk, telling an executive that “the Bank of England’s view should be incorporated” in their daily Libor submission.
Pressed by Mr Tyrie, who said such submissions would have been fabricated and illegal, Mr Del Missier said: “I expected that they would have taken views into account.”
The former Barclays executive said he had not believed deliberately low Libor submissions were illegal, given his understanding of the BoE’s instructions and the global financial crisis unleashed by the collapse of Lehman Brothers.
Mr Del Missier was appointed as chief operating officer of Barclays last month, but forced to resign last week after the bank underestimated the extent of the controversy provoked by news that Barclays and other banks had manipulated Libor.
He said he had not believed he had given illegal instructions – the judgment that has since been made by the UK’s Financial Services Authority and the US’s Department of Justice – because he believed he had followed Bank of England instructions. However, Mr Del Missier was repeatedly unable to explain how the instruction would have been regarded as in any way unusual since Barclays had been submitting deliberately low Libor figures for months in a bid to avoid creating market fears it was in trouble.
Openly doubting Mr Del Missier’s testimony, Labour MP Pat McFadden said a report from the New York Federal Reserve highlighted internal Barclays discussions which led to a false Libor figure being submitted in November 2007.