Today is not a good day for Paul Tucker. There has been considerable passing of the buck by Barclays, the government and the Bank of England over the last week, each trying to avoid any culpability for the Libor rate fixing scandal. But in his inimitable style, former Barclays chief executive Bob Diamond saw to it that the Bank of England was implicated in the scandal, and now a former employee of the Bank has accused deputy governor Paul Tucker of being a ‘spymaster’ who was in regular touch with Diamond for around 10 years. The mess just got messier.
The allegations came from one of financial journalist Dan Conaghan’s sources for his new book on the Bank of England. Allegedly, Tucker was ‘economical’ with what information he ‘passed up and down’, and the former employee also claims that the rate fixing was going on with several banks long before the global financial crisis kicked off in 2008.
Tucker is implicated because of documents released last week by Barclays showing he was concerned that Barclays Libor rate was higher than other banks. Diamond told the Treasury Select Committee last week that he did not interpret this as an instruction to lower the rate, but in making the correspondence public, MT reckons Barclays took a calculated move to divert some attention towards the Bank of England.
The severity of the situation will be of some concern to Tucker, since the Serious Fraud Office has confirmed it is launching an official investigation into the scandal – if Tucker was in cahoots with Barclays and any fraud is uncovered, he could go down as an accessory to fraud.
So many banks have been implicated in the Libor that we reckon the scandal will run and run. And with an angry public baying for blood, can these banking bigwigs and the BoE escaped unscathed? Answers on a postcard…