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| Version 2 | Version 3 |
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| Libor scandal: Del Missier 'instructed' by Diamond | Libor scandal: Del Missier 'instructed' by Diamond |
| (40 minutes later) | |
| A former Barclays executive has told MPs he was instructed by his then boss, Bob Diamond, to cut the bank's Libor interest rate submissions. | A former Barclays executive has told MPs he was instructed by his then boss, Bob Diamond, to cut the bank's Libor interest rate submissions. |
| Jerry del Missier, who quit as Barclays chief operating officer, has appeared before the Treasury select committee. | |
| Asked if a 2008 phone call from his boss was an instruction to cut the rates Mr del Missier said "yes it was". | Asked if a 2008 phone call from his boss was an instruction to cut the rates Mr del Missier said "yes it was". |
| Last month, Barclays was fined £290m after admitting trying to manipulate Libor from 2005 to 2009. | Last month, Barclays was fined £290m after admitting trying to manipulate Libor from 2005 to 2009. |
| Barclays has said that Mr del Missier told his traders to cut the Libor interest rate submissions following a misunderstanding over a note sent from Mr Diamond. | Barclays has said that Mr del Missier told his traders to cut the Libor interest rate submissions following a misunderstanding over a note sent from Mr Diamond. |
| However Mr del Missier told MPs he acted on the basis of a phone call from Mr Diamond made the day before. | |
| "I took the action on the basis of the phone call that I had had with Mr Diamond," Mr del Missier said. | "I took the action on the basis of the phone call that I had had with Mr Diamond," Mr del Missier said. |
| "He [Bob Diamond] said that he had a conversation with Mr Tucker of the Bank of England, that the Bank of England was getting pressure from Whitehall around Barclays, the health of Barclays as a result of Libor rates and that we should get our Libor rates down and that we should not be outliers. | "He [Bob Diamond] said that he had a conversation with Mr Tucker of the Bank of England, that the Bank of England was getting pressure from Whitehall around Barclays, the health of Barclays as a result of Libor rates and that we should get our Libor rates down and that we should not be outliers. |
| "At the time it did not seem an inappropriate action given that this was coming from the Bank of England," Mr del Missier added. | "At the time it did not seem an inappropriate action given that this was coming from the Bank of England," Mr del Missier added. |
| Asked, was it an instruction from Mr Diamond to him to lower Libor, del Missier replied "yes it was." | Asked, was it an instruction from Mr Diamond to him to lower Libor, del Missier replied "yes it was." |
| "I passed the instruction on to the head of the money market desk. I relayed the content of the conversation I had with Mr Diamond and fully expected the Bank of England views would be fully incorporated in the Libor submission," he said. | "I passed the instruction on to the head of the money market desk. I relayed the content of the conversation I had with Mr Diamond and fully expected the Bank of England views would be fully incorporated in the Libor submission," he said. |
| Blind eye | Blind eye |
| MPs asked Mr del Missier how he managed to misunderstand a crucial email from Mr Diamond sent the day after the phone call. | MPs asked Mr del Missier how he managed to misunderstand a crucial email from Mr Diamond sent the day after the phone call. |
| The email had summarised a call between Mr Diamond and Paul Tucker, deputy governor of the Bank of England. | The email had summarised a call between Mr Diamond and Paul Tucker, deputy governor of the Bank of England. |
| It appeared to suggest that the Bank might turn a blind eye if Barclays reduced its high Libor submissions, to avoid appearing under financial stress at the height of the international banking crisis. | It appeared to suggest that the Bank might turn a blind eye if Barclays reduced its high Libor submissions, to avoid appearing under financial stress at the height of the international banking crisis. |
| "Mr Tucker stated... it did not always need to be the case that we appeared as high as we have recently," the notes, written by Mr Diamond said. | "Mr Tucker stated... it did not always need to be the case that we appeared as high as we have recently," the notes, written by Mr Diamond said. |
| Mr del Missier told the committee he believed the Bank of England alone instructed Barclays to lower Libor submissions. | Mr del Missier told the committee he believed the Bank of England alone instructed Barclays to lower Libor submissions. |
| Mr Diamond had 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. | Mr Diamond had 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." | 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." |
| Last week Mr Tucker told the Treasury committee that the last line of Mr Diamond's note "gives the wrong impression". | Last week Mr Tucker told the Treasury committee that the last line of Mr Diamond's note "gives the wrong impression". |
| "We would not suggest anybody did anything wrong," he said, adding that he had not been instructed by anyone in the government to "lean on" Barclays to lower its Libor submissions, Mr Tucker told MPs. | "We would not suggest anybody did anything wrong," he said, adding that he had not been instructed by anyone in the government to "lean on" Barclays to lower its Libor submissions, Mr Tucker told MPs. |
| Illegal? | Illegal? |
| Mr del Missier said that given the global financial crisis in 2008, the controversial rate-rigging did "not seem a significant event given what was going on". | Mr del Missier said that given the global financial crisis in 2008, the controversial rate-rigging did "not seem a significant event given what was going on". |
| MPs asked Mr del Missier several times if the manipulation of rates was illegal. | MPs asked Mr del Missier several times if the manipulation of rates was illegal. |
| However, Mr del Missier said that it was not a "yes or no" matter. | However, Mr del Missier said that it was not a "yes or no" matter. |
| Mr del Missier, who was separately investigated by the FSA and cleared of any wrongdoing, said: "The fact that there were control breakdowns is unacceptable. That's why we're here and I deeply regret that." | Mr del Missier, who was separately investigated by the FSA and cleared of any wrongdoing, said: "The fact that there were control breakdowns is unacceptable. That's why we're here and I deeply regret that." |
| Asked if he was the "fall guy" for Mr Diamond, he said: "I don't think I'm acting as a fall guy. I've resigned my position with the bank, for the good of the bank. I'm not the fall guy for anything." | Asked if he was the "fall guy" for Mr Diamond, he said: "I don't think I'm acting as a fall guy. I've resigned my position with the bank, for the good of the bank. I'm not the fall guy for anything." |
| He said he and Mr Diamond were "professional friends" but did not "socialise very often". | He said he and Mr Diamond were "professional friends" but did not "socialise very often". |
| Asked if he could understand why some held the view that there was a conspiracy among Barclays' top executives, Mr del Missier said: "I can understand why there is resentment towards Barclays and the banks." | Asked if he could understand why some held the view that there was a conspiracy among Barclays' top executives, Mr del Missier said: "I can understand why there is resentment towards Barclays and the banks." |
| The Libor rates are used to price trillions of dollars worth of deals between banks and other financial companies, as well as being used as the benchmark for pricing loans to businesses, as well as some mortgages. | The Libor rates are used to price trillions of dollars worth of deals between banks and other financial companies, as well as being used as the benchmark for pricing loans to businesses, as well as some mortgages. |
| 'Gaming culture' | |
| Mr del Missier's evidence was followed by appearances from Lord Turner, chairman of the FSA, and Andrew Bailey, head of the regulator's banking supervisory arm. | |
| Both men highlighted their worries about Barclays' investment bank culture, and its attitude to risk. | |
| Mr Bailey said: "There was a culture of gaming. It had to change." He added later: "You could not escape the conclusion that the culture of this institution was coming from the top." | |
| Lord Turner said that the FSA told Barclays' board of its concerns through a meeting and a letter. He denied the FSA was, as one MP put it, "asleep at the wheel". |