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Barclays ex-boss Bob Diamond faces MPs' questioning Barclays ex-boss Bob Diamond faces MPs' questioning
(about 4 hours later)
Bob Diamond is due to be grilled by MPs on Wednesday, a day after the Bank of England and "Whitehall figures" were implicated in the Libor-rigging row.Bob Diamond is due to be grilled by MPs on Wednesday, a day after the Bank of England and "Whitehall figures" were implicated in the Libor-rigging row.
The former Barclays chief executive, who resigned on Tuesday, is giving evidence to the Treasury Committee.The former Barclays chief executive, who resigned on Tuesday, is giving evidence to the Treasury Committee.
His appearance was arranged before the latest furore, but he is likely to be quizzed about who knew what and when.His appearance was arranged before the latest furore, but he is likely to be quizzed about who knew what and when.
There have been suggestions the BoE's deputy governor and senior Whitehall officials knew rates were manipulated.There have been suggestions the BoE's deputy governor and senior Whitehall officials knew rates were manipulated.
Amid reports that Mr Diamond was pressured to resign, there is speculation that he will use the committee hearing to hit back at senior political and City personnel.Amid reports that Mr Diamond was pressured to resign, there is speculation that he will use the committee hearing to hit back at senior political and City personnel.
David Yarrow, partner at fund manager Clareville Capital, told the BBC that he expected Mr Diamond to "come out with all guns blazing".
Robert Peston, the BBC's business editor, said that Mr Diamond "has an opportunity to take his revenge if he so chooses".Robert Peston, the BBC's business editor, said that Mr Diamond "has an opportunity to take his revenge if he so chooses".
On Tuesday, Barclays released Mr Diamond's note of a conversation in 2008 with the Bank of England's Paul Tucker.On Tuesday, Barclays released Mr Diamond's note of a conversation in 2008 with the Bank of England's Paul Tucker.
Mr Diamond writes that Mr Tucker told him of concerns among "senior figures within Whitehall" about why Barclays was setting its Libor rate at the "top end".Mr Diamond writes that Mr Tucker told him of concerns among "senior figures within Whitehall" about why Barclays was setting its Libor rate at the "top end".
He went on: "Mr Tucker stated the levels of calls he was receiving from Whitehall were senior and that, while he was certain that we did not need advice, that it did not always need to be the case that we appeared as high as we have recently."He went on: "Mr Tucker stated the levels of calls he was receiving from Whitehall were senior and that, while he was certain that we did not need advice, that it did not always need to be the case that we appeared as high as we have recently."
Subsequently, the Libor borrowing rates submitted by Barclays fell, potentially understating the extent of the bank's borrowing costs.Subsequently, the Libor borrowing rates submitted by Barclays fell, potentially understating the extent of the bank's borrowing costs.
Wrong impression?Wrong impression?
The Libor inter-bank rate plays a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.The Libor inter-bank rate plays a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.
Manipulating the rate might have given the impression that Barclays - and other banks also thought to have used the practice - was in a stronger financial position than it was.Manipulating the rate might have given the impression that Barclays - and other banks also thought to have used the practice - was in a stronger financial position than it was.
Barclays said in Tuesday's statement that Mr Diamond did not view his conversation with Mr Tucker as an instruction to change its rates submission.Barclays said in Tuesday's statement that Mr Diamond did not view his conversation with Mr Tucker as an instruction to change its rates submission.
However, after the phone call with Mr Tucker, Mr Diamond relayed the conversation to Jerry del Missier, a senior executive in Barclays investment banking arm BarCap. However, after the phonecall with Mr Tucker, Mr Diamond relayed the conversation to Jerry del Missier, a senior executive in Barclays investment banking arm BarCap who resigned on Tuesday.
Barclays said: "Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect to the [traders]."Barclays said: "Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect to the [traders]."
Mr del Missier also resigned on Tuesday. His role in the affair has been investigated by the Financial Services Authority. Barclays said the FSA "closed the investigation without taking any enforcement action".
It is unclear who the "senior Whitehall" figures mentioned by Mr Diamond were.It is unclear who the "senior Whitehall" figures mentioned by Mr Diamond were.
Documents seen by the BBC on Monday indicate that ministers in the last Labour government held discussions with banks about policies which would allow the Libor rate to fall.Documents seen by the BBC on Monday indicate that ministers in the last Labour government held discussions with banks about policies which would allow the Libor rate to fall.
'No recollection''No recollection'
Speculation about how much the government of the day knew prompted a statement on Tuesday evening from former Labour minister Baroness Vadera of Holland Park.Speculation about how much the government of the day knew prompted a statement on Tuesday evening from former Labour minister Baroness Vadera of Holland Park.
She said she "has no recollection of speaking to Paul Tucker or anyone else at the Bank of England about the price setting of Libor".She said she "has no recollection of speaking to Paul Tucker or anyone else at the Bank of England about the price setting of Libor".
Barclays also said in its Tuesday statement that it told regulators it was concerned about the Libor rates posted by other banks, "and we were disappointed that no effective action was taken".
Mr Diamond's resignation came less than a week after Barclays was fined £290m for its role in Libor manipulation.Mr Diamond's resignation came less than a week after Barclays was fined £290m for its role in Libor manipulation.
The BBC's Robert Peston has disclosed that Mr Diamond was encouraged to go by Bank of England governor Sir Mervyn King and the head of the FSA Lord Turner.The BBC's Robert Peston has disclosed that Mr Diamond was encouraged to go by Bank of England governor Sir Mervyn King and the head of the FSA Lord Turner.
No details of Mr Diamond's severance package have been disclosed, although former City minister Lord Myners told BBC radio's World At One any payoff could be between £20m and £30m.
Tuesday's resignations follow an announcement on Monday that Barclays chairman Marcus Agius will stand down.Tuesday's resignations follow an announcement on Monday that Barclays chairman Marcus Agius will stand down.
However, he will now take over the running of Barclays until a new chief executive is appointed. However, he will now take over the running of the bank until a new chief executive is appointed.