Paul Tucker denied allegations over him leaning on Barclays in its over-bank lending rates. He further stated to the MPs that the BoE and the government were troubled over the Barclays probable need for a bailout. Former Barclays chief executive Bob Diamond in a conversation between the two apparently gave a wrong impression according to Tucker.
Mr. Diamond’s note of the conversation ended by stating Tucker having said it wasn’t the intention that they appeared to be high with Libor submissions recently. Tucker further stated that he conversed with the Treasury Committee but unlike Mr. Diamond he wasn’t able to place on record their conversation.
Word of caution
Although Tucker stated that the BoE did not speculate the end of Barclays in 2008 there was apprehension regarding the bank’s funding capability. During that time Barclays’ submissions of its borrowing rates were comparatively higher than other banks, Tucker claimed that we did cautioned Diamond that Barclays are risking scaring investors to a level that they might probably find the market nearly close to it.
BBC business editor Robert Preston commented that the BoE governor told Diamond to face reality on Barclays’ dealing positions to halt becoming the next dominant bank at present to become partially nationalised. Several Emails on Monday revealed that the BoE had apparently daily talks with Barclays regarding inter-banking lending by October 2008’s end.
At the height of the financial crisis, Barclays was trying to manoeuvre Libor rates by passing lower borrowing rates. The said rates that were passed by a several other banks got into the circulation of the daily Libor (London inter-banking lending rate) which was the foundation for millions of everyday financial dealings.
Tucker who had recently made a request for a hearing with the Treasury Select Committee was on the hot seat when he was asked if there were any government official in 2008 to lean on Barclays to lower their Libor submissions. More specifically, he was questioned regarding Shriti Vadera, and adviser to the then-Prime Minister Gordon Brown and shadow chancellor Ed balls who was also the labour Minister back then. Tucker’s response was stern and frank that he did not have any meetings with the said people nor even had a personal conversation throughout the period.