Libor scandal: Barclays quick to get in its retaliation
BARCLAYS opted to get its retaliation in first last night by publishing a nine-page memo on the rate-fixing scandal.
It seeks to separate out the two different forms of fixing which have been going on at the bank. Pre-crash, it acknowledges that traders were actively manipulating the books in order to turn a profit. Barclays claims these were “the actions of a few” and that “senior management were not aware”. For this, Mr Diamond is sorry.
Then there was the fixing during the crash, when the City was terrified by the prospect of at least one of Britain’s mega-banks collapsing and taking the entire economy with it. Barclays’ submission is that all the other banks were artificially lowering the rate at which they were charged to borrow cash in order to avoid the impression of weakness. Since the regulators and the Bank of England were not heeding their complaints, Barclays claims it had no choice but to follow suit in order to avoid “unfounded negative perceptions” about their solvency.
For this, the bank most certainly does not feel sorry. Given the release last night of Mr Diamond’s e-mail relating how the Bank of England suggested he might tweak the numbers, it appears Barclays is more than a little aggrieved to be in the dock. By releasing that e-mail, it has thrown the attention back on to the regulators and politicians who now stand accused of not to acting against more widespread allegations of fiddling.
As for his own conduct during that period, it seems Mr Diamond is preparing what might be called the Murdoch defence for his appearance before the Treasury select committee today: in other words, it wasn’t me.
In the memo, Mr Diamond insists he did not take the Bank of England’s call as “an instruction” to lower his bank’s rates. Nor, he claims, did he then instruct his subordinate, Jerry del Missier, to do the same. He claims Mr del Missier nonetheless “concluded an instruction had been passed down from the Bank of England not to keep Libors so high”.
Mr Diamond appears determined to go with his hands as clean as he can.
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Saturday 18 May 2013
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