Yesterday afternoon, the deputy governor of the Bank of England Paul Tucker utterly refuted all suggestions that he had leant on Barclays to manipulate the interest rate at which it was lending to other banks. In his hearing before the Treasury Select Committee, Tucker was more direct in his evidence than Bob Diamond, saying the Libor scandal had come as a ‘deep shock’ and that ‘I can’t be confident of anything after hearing about this cesspit.’
And this morning - it’s unclear what has prompted it - Barclays’ old boss Bob Diamond has volunteered to give up bonuses worth around £20m. That’s not to say he won’t still receive the £2m cash payment that he receives each year in lieu of a pension, but it is nonetheless valiant of him, right? Former Barclays chairman, Marcus Agius, revealed the fact of his Diamond’s Amazing Shrinking Bonus in his evidence before the committee this morning.
The committee is currently trying to work out what (if any) role the Bank of England and the government of the time played in the Libor rate fixing between 2005 and 2008 when it was allegedly rife. Agius – who was still being questioned at the time of writing – said he was not aware of rate fixing at Barclays when it was going on, despite the fact that Barclays had itself identified the practice as a problem in other banks. Why is it that that all three men are denying knowledge of the rate fixing, and all denying that any instructions were passed down to traders to fix the rates?
Needless to say, MPs on the committee are starting to look positively amused by it all, suspecting a cover up of some potentially damning facts. Still, we’re no closer to knowing whether management knew, or the Bank of England or government encouraged the rate fixing. The three have so far offered a masterclass in well-spun damage limitation rhetoric: ‘I love Barclays’, ‘it was wrong and shouldn’t have happened’, ‘no-one’s saying this behaviour wasn’t reprehensible.’
All well and good, but if they are hoping the Libor scandal will simply go away, they are likely to be mistaken…