Free Republic
Browse · Search
Topics · Post Article

Skip to comments.

Bob Diamond: banks across the world were fixing interest rates in run-up to the financial crisis
Belfast Telegraph ^ | Thursday, July 5, 2012 | Oliver Wright and James Moore

Posted on 07/04/2012 11:54:14 PM PDT by Jyotishi

Banks across the world were fixing interest rates in the run-up to the financial crisis but regulators failed to take action to stop it, the former head of Barclays claimed yesterday.

Giving evidence to Parliament Bob Diamond said Barclays had raised the issue of banks ‘under-reporting’ the true amount they were having to pay to borrow money but were ignored.

He declined to say that the regulators “were asleep at the wheel” but added: “There was an issue out there. (It) should have been dealt with”.

But Mr Diamond denied that the Bank of England told him specifically to ‘fix’ interest rates during a phone conversation during October 2008.

He told the Treasury Select Committee he “didn't believe” he had “received an instruction” from Deputy Governor Paul Tucker about the fixing of interest rates.

However he said that his conversation with Mr Tucker had led him to fear that the Government might attempt to nationalise the bank just days before it was able to secure funding from the Middle East that would allow it to survive as an independent bank.

Mr Diamond said was deeply concerned that ‘Whitehall officials’ might step in and take drastic action which could scupper the deal because they thought that Barclays Libor rates were too high to be sustainable.

He said it was for that reason that he had written a memo to the chief executive of the bank John Varley describing his conversation with the Mr Tucker about the fixing of interest rates.

He added he did not know for certain who the Whitehall officials, referred to in his memo, were and added it would be “wrong to speculate” about who they might have been.

He said he “did not think” they were ministers and did not think anyone in Government had suggested that Barclays should be fix rates.

“My reaction (of the call with Mr Tucker) was an appreciation of that he was doing his job. Ministers were hearing that Barclays (Libor rates) were high and my first reaction was John (Varley) - you have to get to Whitehall and let them know that we are funding fine.”

He added he was concerned that any action by the Government could scupper its Middle East Funding deal.

“We had an equity issue about to settle in two days. This was a very, very pressurised situation.”

Looking nervous and sounding contrite Mr Diamond opened his evidence by declaring his “love” for Barclays but added: “At the core of the issues there clearly were mistakes, clearly there was behaviour that was reprehensible.”

He said when he read the emails from Barclays traders about the fixing of the Libor rates he felt “physically ill” and did not represent “that the Barclays that I know and that I love”.

Mr Diamond said he only learnt that “low balling” - the fixing of the Libor rate - was going on at the bank this month, some four or five days before the practice was publicly disclosed.

He said he had no knowledge that anything untoward was taking place in October 2008, insisting he was never made aware of the issues.

“It wasn't brought to that level and a part of that was that there were ongoing meetings at a level, below that,” he told the hearing.

"There was a feeling that it had been resolved."

Asked if criminal punishment for bank chiefs would act as a deterrent, Mr Diamond said: "That is an issue for the regulator".

Pressed further, he said: "People who are doing things they are not supposed to do should be dealt with harshly.

He added: "We've been dealing harshly with our people."

“I'm sorry. I'm disappointed and I'm so angry. There's no excuse.”

He added: "This was wrong. I'm not happy about it."

Mr Diamond said he did not know whether Barclays chairman Marcus Agius had come under pressure from regulators to bring about his resignation.

He suggested that over the weekend he had been determined to stay at the helm of the bank.

But he added: "It was clear to me on Monday that the support wasn't as strong and I needed to take this step."

Mr Diamond suggested he and Barclays had been the victims of an "unfortunate series of events", and there had been problems at other banks.

“I think there has been an unfortunate series of events in the last week around Barclays being identified as the first in what was a report that clearly showed very, very bad behaviour by groups of people."

He insisted that senior executives had dealt with the problems "appropriately" and regulators had praised their co-operation with the investigation.

Earlier David Cameron condemned the “spivvy and probably illegal” activity in of banks fixing interest rates.

Mr Cameron said it was "outrageous" that homeowners may have been forced to pay higher interest rates as a result of efforts to rig the benchmark Libor and Euribor rates.

But he refused to back Labour's calls for a judge-led inquiry into the culture of the City saying he believed the matter was better investigated by Parliament. He added that this would be “swift and decisive”.

However the Labour leader Ed Miliband said Mr Cameron's reluctance to set up an investigation along the lines of the Leveson Inquiry into media practices showed he did not understand the scale of public concern over the banking scandal.

TOPICS: Business/Economy; Crime/Corruption; Government; News/Current Events
KEYWORDS: 200810; agius; arabmoney; banking; bankofengland; banks; barclays; diamond; economy; euribor; finance; interestrates; liborrates; marcusagius; middleeast; octobersurprise; paultucker; qatar; qia; ratefixing; raterigging; robertdiamond

1 posted on 07/04/2012 11:54:24 PM PDT by Jyotishi
[ Post Reply | Private Reply | View Replies]

To: Jyotishi

Obama canabalizing the banks, and the world economy.

2 posted on 07/05/2012 12:01:20 AM PDT by Uncle Slayton
[ Post Reply | Private Reply | To 1 | View Replies]

To: Uncle Slayton; blam

Barclay’s Millions Help To Prop Up Mugabe (Zimbabwe) Saturday, January 27, 2007 8:52:12 PM · by blam · 9 replies The Guardian (UK) ^ | 1-28-2007 | Antony Barett - Christopher Thompson,,2000349,00.html

3 posted on 07/05/2012 12:12:20 AM PDT by piasa (Attitude adjustments offered here free of charge)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Jyotishi

Following the European Central Bank’s lead?

4 posted on 07/05/2012 12:24:23 AM PDT by Olog-hai
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jyotishi

Middle East involved, thing led to the crisis. Many have said the crisis was deliberately triggered...

5 posted on 07/05/2012 2:23:12 AM PDT by Hardraade ( (nobody gives me warheads anyway))
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jyotishi

Banks fixing interest rates?

What nerve!

That’s the job of the US Government!

6 posted on 07/05/2012 2:25:50 AM PDT by Iron Munro (John Adams: 'Two ways to enslave a country. One is by the sword, the other is by debt')
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jyotishi

I guess that explains why, in addition to fabricating FICO scores, Argent Mortgage/Ameriquest seemed to have a significantly higher number of loans for which LIBOR was the basis instead of the American Prime.   Always wondered about that.

Best RATs and RINOs LIBOR-based A$$Paper could buy.

It is incumbent upon the honorable craftsman to be aware
of whether or not his services are being used
as a means to accomplish evil ends -
and to act (or NOT) accordingly.

7 posted on 07/05/2012 6:13:53 AM PDT by OldEarlGray (The POTUS is FUBAR until the White Hut is sanitized with American Tea)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson