'Critical' Bank of England emails to Barclays released

 

A batch of "critical" emails sent from the Bank of England deputy governor Paul Tucker to former Barclays boss Bob Diamond were released today ahead of a highly anticipated hearing on the Libor-fixing scandal.

The correspondence appears to provide further evidence of Mr Tucker's concerns over Barclays financial health at a time when the bank was accused of manipulating its Libor submissions.

In one email, Mr Tucker said he was "struck" that Barclays had issued a government-guaranteed bond with a high yield, which could be a sign that Barclays was struggling to secure funding. "That's a lot," Mr Tucker added.

Mr Diamond last week released a note of a phonecall with Mr Tucker, who will appear before the Treasury Select Committee to clear up his role in the affair later today, which ultimately led to the Bank lowering its Libor submissions.

Committee member John Mann MP, who obtained the emails under a Freedom of Information request, said the messages were "critical" and accused the Bank of stalling in handing them over.

An additional email exchange disclosed by Mr Mann confirms Sir Jeremy Heywood, the then Downing Street chief of staff, raised concerns over the high rate of Libor submissions in the UK, compared to the US.

Sir Jeremy forwarded a note from UBS to Mr Tucker, in which the Swiss bank advocates "speeding up" the gradual decline in the interbank lending rate in the emails sent in late October 2008.

In the phone call disclosed by Mr Diamond, Mr Tucker, a forerunner for the position of Bank Governor when Sir Mervyn King steps down, relayed concerns by "senior Whitehall figures" that Barclays' Libor rates were higher than other banks.

The American banker said Mr Tucker did not reveal who the Whitehall figures were, but he took them to be "officials within the Government".

Mr Diamond, who resigned with immediate effect last Tuesday, told MPs he was left "confused" by the contentious phone call with Mr Tucker.

But despite being unclear about his motives, Mr Diamond said his reaction to the conversation was "appreciation of Paul Tucker for doing his job".

Mr Diamond said there were 14 or 15 other banks, including nationalised lenders such as Royal Bank of Scotland, which he knew had a weaker financial position than Barclays and were still submitting lower Libor rates.

Outlining his interpretation of Mr Tucker's comments, he said: "He felt that our Libor rates, relevant to the other 15 posters, could be lower."

But he insisted he did not feel that any action had been requested.

"I didn't feel it was an instruction," he said.

However, Mr Diamond's account of the conversation ultimately led to the then president of investment banking arm Barclays Capital, Jerry del Missier, telling staff to submit lower Libor.

Meanwhile, the fierce debate over banking ethics continued as Labour leader Ed Miliband unveiled his vision for change in the banking sector.

In a speech, he pointed to the Libor rate-fixing scandal as vindication of his much-criticised attack last year on "predatory" capitalism and promise wide-ranging action.

Mr Miliband said he would like to see Britain's top five high street banks broken up and forced to sell up to 1,000 branches to pave the way for two new privately-run challenger banks to bolster competition in the sector.

Lloyds Banking Group is already selling off more than 600 branches, with Co-operative Bank currently in exclusive talks to form what would amount to one of the challenger banks included in Mr Miliband's overhaul.

The Opposition leader also wants a new code of conduct for the banks to follow.

In addition, Mr Miliband would like to see a specialist banking unit set up with the Serious Fraud Office to tackle the "weak and fragmented" approach to fraud investigations.

As the debate continues, pressure continues to build on Mr Diamond to waive at least part of a reported £17 million golden parachute deal, while the bank also considers spinning off Barclays Capital.

The bank's board is understood to have had discussions with the Association of British Insurers, the trade group which represents billion of pounds of pension funds' investments, over plans to open negotiations with Mr Diamond over his exit pay.

Marcus Agius, who also announced his intention to step down but will remain until Mr Diamond's successor is found, will give evidence to MPs tomorrow but is likely to tell them nothing has been decided.

On Friday, the Serious Fraud Office launched a criminal investigation into alleged Libor-rigging at Barclays and the wider industry.

PA

PROMOTED VIDEO
News
Jamie and Emily Pharro discovering their friend's prank
video
News
i100
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
News
people
Life and Style
techApp to start sending headlines, TV clips and ads to your phone
Arts and Entertainment
Taylor Swift crawls through the legs of twerking dancers in her 'Shake It Off' music video
musicEarl Sweatshirt thinks so
Life and Style
tech
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Daniel Radcliffe and Zoe Kazan in What If
filmReview: Actor swaps Harry Potter for Cary Grant in What If
News
Our resilience to stress is to a large extent determined by our genes
science
Travel
travel
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Pornography is more accessible - and harder to avoid - than ever
news... but they still admit watching it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Techincal Accountant-Insurance-Bank-£550/day

£475 - £550 per day + competitive: Orgtel: Senior Technical Accountant-Insuran...

Sales Performance Manager, Gloucester - £290 p/day

£200 - £290 per annum + competitive: Orgtel: Sales Performance Manager, Key Ba...

Junior Database developer (SQL, T-SQL, Excel, SSRS, Crystal rep

£25000 - £30000 per annum + bonus+benefits+package: Harrington Starr: Junior D...

Java/Calypso Developer

£600 - £800 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, ...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment