Tory MP urges Osborne to apologise to Balls over Libor
A Conservative MP has urged Chancellor George Osborne to apologise to rival Ed Balls for saying he had “questions to answer” over the Barclays rate-fixing scandal.
Andrea Leadsom made the plea after the deputy governor of the Bank of England “absolutely” rejected suggestions he had leant on the bank to manipulate the Libor or that Labour ministers had encouraged him to do so.
Ms Leadsom, who sits on the Treasury Select Committee, said fellow Tory Mr Osborne had made a mistake last week by claiming that figures in Gordon Brown's inner circle were involved in pressurising Barclays into altering the key lending rate.
The MP told BBC Radio 4's World Tonight programme: “Obviously he made a mistake and I think he should apologise.
“I think it was a very valid discussion at the time about who knew what and it has now been completely squashed by Paul Tucker.”
Mr Tucker, who is a frontrunner for the role of Governor when Sir Mervyn King steps down, yesterday told MPs a record of a contentious phonecall he had with former Barclays boss Bob Diamond about Libor gave the “wrong impression”
Appearing in front of the Treasury Select Committee, the senior banker said he had intended to ensure Barclays was not “inadvertently sending distress signals” about its financial health at a time when the market viewed the bank as the next in line for a government bailout.
The deputy governor rejected claims that the then Downing Street chief of staff Sir Jeremy Heywood, then City minister Ed Balls and former Treasury minister Baroness Vadera had asked him to pressure Barclays to lower its Libor submissions.
Labour seized on his comments as proof that Mr Osborne was wrong to make the claims, which first surfaced in the media before being repeated in the House of Commons, and demanded a public apology.
Labour Treasury spokesman Chris Leslie said: “This is now the final nail in the coffin of the Tory smear campaign the Chancellor led last week. It is now crystal clear that the allegations he threw around were completely wrong and without foundation.”
Barclays chairman Marcus Agius will today face the parliamentary committee and is expected to be asked about fines issued against the bank and the resignation of Mr Diamond, who stepped down last week in the wake of the scandal.
Pressure is continuing to build on the former chief executive to waive at least part of a reported £17 million golden parachute deal.
Mr Agius has also announced his intention to step down but will remain until Mr Diamond's successor is found.
Barclays has been the focal point for a row over banking culture after the bank was fined £290 million by UK and US regulators for manipulating the Libor, which affects mortgages and loans.
Mr Tucker found himself in the spotlight after Mr Diamond published his account of a phonecall, in which it has been suggested Mr Tucker was encouraging the bank to submit lower Libor submissions in light of concerns from senior Whitehall figures.
Mr Tucker said that concerns about Barclays' submissions existed at the time he spoke to Mr Diamond in October 2008 not only in Whitehall but also in the markets.
After the launch of a package of co-ordinated international efforts to shore up the markets earlier in the month, both officials and markets were monitoring Libor and found that - compared to many other participants which had lowered their submissions - “Barclays continued to pay higher rates in the market, as reflected in their Libor submissions”.
The deputy governor said there was concern that Barclays was “next in line” to collapse and require taxpayer assistance after Royal Bank of Scotland and Lloyds Banking Group.
Mr Tucker said he contacted Mr Diamond to discuss its high Libor submissions because the economic climate was “fragile” and banks needed to be careful.
During his evidence he also described the setting of the Libor rate as “a cesspit” and called for an end to the practice of “self-certification” under which banks submit figures on the basis of their own judgments rather than actual transactions.
PA
-
Jeremy Paxman reveals he has heard senior Tories calling activists 'swivel-eyed loons'
-
Gay couple beaten in park urge MPs to moderate language on gay marriage
-
Strewth mate. Aussies wave goodbye to Britain as it becomes too pricey to stay
-
X marks the spot: The find that could rewrite Australian history
-
Oklahoma tornado latest: Obama pledges support for 'as long as it takes' to rebuild the suburb of Moore
- 1 'He was lucky he didn't die' - George Michael fell out of speeding car onto M1 motorway, according to eye witness
- 2 Austerity has hardened the nation's heart
- 3 Gay couple beaten in park urge MPs to moderate language on gay marriage
- 4 Why Arsène Wenger must spend to put icing on the cake and buy likes of Stevan Jovetic for Arsenal
- 5 'It was just like the movie Twister': Man survives Oklahoma tornado by taking refuge in horse stall
Get your summer started with British Military Fitness
BMF is the UK’s biggest and best loved outdoor fitness classes
Visit York
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Enter the latest Independent competitions
Win anything from gadgets to five-star holidays on our competitions and offers page.
Business videos from commercial thought leaders
Watch the best in the business world give their insights into the world of business.
Independent Dating
iJobs General
PHP/ Drupal Developer
£30000 - £45000 per annum + Bens: Progressive Recruitment: Exciting opportunit...
Sap Bi And Sap Epm And Sap Eim
Negotiable: Progressive Recruitment: SAP BI Specialist - Contract - 6 Months -...
Sap Bi And Sap Epm And Sap Eim
Negotiable: Progressive Recruitment: SAP BI, SAP BO, SAP EPM, SAP EIM, Contrac...
BUSINESS INTELLIGENCE SAP SENIOR CONSULTANT
£50000 - £56000 per annum: Progressive Recruitment: BUSINESS INTELLIGENCE SAP ...
Day In a Page
The price of pacifism
Jason Isaacs: Groupies, theatre bores and James Bond
Sealand: 'Micronation' or illegal fortress?
Legend of James Hunt has set Hollywood hearts racing
Macklemore: 'I don't have moderation'







Comments