Diamond may be questioned in Washington over rate-fixing scandal

Heat rises on former Barclays boss - with Del Messier set to appear before MPs

Bob Diamond, the former Barclays chief executive, could be called to Washington to answer questions to Congress about the Libor fixing scandal, it was reported last night.

US politicians in the Senate Banking Committee and the House Financial Services Committee were yesterday reportedly considering summoning Mr Diamond to testify before them.

Senator Tim Johnson, chairman of the banking committee, said his panel would ask Federal Reserve chairman, Ben Bernanke, and Treasury Secretary, Timothy Geithner, about the scandal at hearings before the summer recess in August.

"I am concerned by the growing allegations of potential widespread manipulation of Libor and similar interbank rates by some financial firms," Mr Johnson said on Tuesday.

In London next Monday, Bob Diamond's one-time number two at Barclays will appear before MPs in a hearing that could see some of the most heated exchanges yet over the Libor interest rate-fixing scandal.

Jerry del Missier quit as Barclays' chief operating officer hours after Mr Diamond stepped aside last week amid public fury over the bank's conduct. He allegedly instructed traders to manipulate Libor rates down believing he was acting on instructions from Paul Tucker, deputy governor of the Bank of England.

That followed the circulation of a note by Mr Diamond of a conversation he had with Mr Tucker during which the latter said there was concern in Whitehall at Barclays submission of high Libor rates. Mr Diamond said he did not interpret the conversation in the same way as Mr del Missier.

The Financial Services Authority made clear when Mr Diamond was appointed that it wanted him to closely supervise the Mr del Missier, who took over the running of Barclays Capital following his boss's promotion.

The US Justice Department is already investigating the scandal while city and state pension funds have launched legal action, claiming their investments suffered from the manipulation of Libor rates. Barclays was fined £290m by regulators in the UK and US over allegations it manipulated Libor last month. More than a dozen other banks are being investigated for their roles in setting Libor rates.

White-collar crime expert William Black, Professor of economics and law at University of Missouri Kansas City, said US action would soon escalate the scandal.

"We have very tough disclosure laws. We've already seen how horrific these people's emails can be, there's going to be a lot more where that came from," he told The Guardian.

Wayne State University law professor Peter Henning said the scandal had the potential to become "the signature financial fraud of the meltdown."

The Justice Department's fraud division was looking after the case, not the anti-trust division, he said.

"They are looking at this as a fraud case. That's much more serious for any individual involved. Given the amounts of money we are discussing, there could be serious jail time if anyone is convicted," he added.

Around 45 per cent of US mortgages are tied to Libor rates, and cities including Baltimore are claiming they have had to cut essential services as a result of losing money on investments tied to Libor.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever