Bank of England faced government pressure over Barclays Libor rates, says former COO

The Bank of England was coming under pressure from the UK government at the height of the credit crisis in regards to Barclays and its seemingly high Libor quotes to the British Bankers Association.

Jerry del Missier, former chief operating officer of Barclays, said he had spoken about this to his then CEO Bob Diamond, and had told those submitting Libor quotes from Barclays’ money markets desk about this, too.

He is testifying to the House of Commons Treasury committee, as part of its ongoing investigation into the Libor rate-fixing scandal.

Diamond has already told the committee Barclays’ submissions were consistently within the three highest from 16 banks providing Libor quotes to the BBA, on each trading day in October.

The submissions provided the basis for Libor, the official rate at which UK banks can borrow and lend to one another.

Del Missier said: “Given Barclays was [giving] high rates, I’d have expected taking [his discussion with Bob Diamond] into account would have resulted in lower submissions [from Barclays].”

“I passed the instruction as I received it to the head of the money markets desk. I relayed the contents of the conversation I had with Bob Diamond, and fully expected the BoE’s views would be incorporated in the Libor submissions.”

He said the views of the Bank of England “as the institution responsible for the stability of the system and with visibility across the entire market…are extremely relevant here.”

He said the possibility of lowering Libor quotes “at the time seemed appropriate, given everything that was going on – given the BoE in its role as responsible for the stability of the system and oversight across the whole of the market.”

He added Libor rates at the time were “hugely, hugely subjective. There is very little activity going on.”


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