Lowering Libor move ‘seemed appropriate’
A former Barclays director who told staff to lower their Libor submissions in the midst of the financial crisis following a misunderstanding with the Bank of England yesterday said the move seemed “appropriate”.
Jerry del Missier was dragged into the affair when it emerged he had misinterpreted a conversation between Bob Diamond and Bank of England deputy governor Paul Tucker as an instruction to lower Libor submissions amid fears over Barclays’ financial health.
The Canadian banker, who resigned as Barclays’ chief operating officer two weeks ago at the same time as Bob Diamond quit as chief executive, said he “fully expected” staff to take into account the views raised by the bank that the bank’s rates were too high.
However, Mr del Missier told the Treasury Select Committee that he only spoke to the head of the money market desk and did not follow up to check what effect his instruction had on Libor submissions.
Mr del Missier told the committee he believed the Bank of England alone instructed Barclays to lower Libor submissions.
Mr Diamond previously told the committee he did not believe the Bank of England instructed the bank to lower the inter-bank lending rate and did not believe he instructed Mr del Missier to do so.
Asked how he could have misinterpreted Mr Diamond’s conversation, Mr del Missier said: “I can only tell you what I clearly recall from the conversation.”
Mr del Missier, who was co-head of the investment arm Barclays Capital at the time the rates were lowered in 2008, denied that the low-balling of Libor rates was “improper” in the context of what was happening in the financial sector at the time.
He said: “What was communicated to me by Mr Diamond was that there was political pressure on the bank regarding Barclays’ health, and that we should get our Libor rates down.
Mr del Missier added he was in “regular communication but not always daily” with Mr Diamond.
Mr del Missier identified the head of the money markets desk, to whom he relayed the instruction to lower Libor rates, as Mark Dearlove.
Mr del Missier told the committee he was not aware of any low-balling before the contentious phonecall between Mr Tucker and Mr Diamond.
MP Pat McFadden said Barclays “was up to its armpits in dishonest activity” in the year running up to the phonecall – and said it was hard to believe Mr del Missier was unaware it was occurring.