Hamish McRae: Could the man from the Bank of England really have stoked these lies? It's unthinkable

Let's wait until the full details of the phone call are clarified before leaping to condemn any of the participants

Share
Related Topics

Yesterday it emerged Barclays' second wave of Libor-fixing followed a telephone call between Bob Diamond and deputy governor of the Bank of England Paul Tucker at the height of the financial crisis. But this is no reason to presume any illicit sanction.

Words get twisted. The reference in the FSA's judgement on the Barclays/Libor case to the conversation in question made clear that the bank's response to the call was based on a "misunderstanding or miscommunication".

So let's wait until the full details of the phone call between Mr Tucker, pictured, and Mr Diamond are clarified before leaping to condemn any or all of the participants. But as the facts emerge let's bear in mind five things.

The first is the time-scale. What was or was not said in that phone call – and what was or was not said as the message was passed down the line – happened at the end of October 2008. The systemic distortion of Libor, over which Barclays was fined, occurred over a period of several years before that.

Second, late October 2008 was an exceptional time, the moment when the world's money markets froze and many banks found they could not raise money. Preserving Libor as the rate at which the world's prime banks could still trade deposits was vital to trillions of commercial contracts.

Third, informal contacts between the Bank of England and the big London banks helped hold the system together for a crucial few days. It is not widely know that HSBC, at the behest of the Bank, lent emergency funds over a weekend to keep Royal Bank of Scotland going until the government-led rescue was in place.

Fourth, at the height of the crisis Barclays was seen by many as being the next domino likely to fall, so it was vital any unfounded rumours about its status be contained. And lastly, anyone who knows senior Bank of England staff would find it unthinkable they should tell anyone at a commercial bank to lie. There is and should be a tension between the central bank and commercial banks, just as there has to be co-operation between them. But words do get twisted.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Trainee Recruitment Consultant - SThree Group - Bristol

£18000 - £23000 per annum + Uncapped Commission: SThree: SThree Group has been...

Trainee Recruitment Consultant - SThree Group - Birmingham

£18000 - £23000 per annum + Uncapped Commission: SThree: SThree Group has been...

Trainee Recruitment Consultant - Birmingham - Computer Futures

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant - SThree - £18k Starting Salary

£18000 - £23000 per annum + Uncapped Commission: SThree: SThree Group has been...

Day In a Page

Read Next
Reeva Steenkamp is  

Since Reeva Steenkamp's death, 243 women have been killed by male violence in the UK alone

Sian Norris
Actor Brad Pitt  

The over-50s have the real voting and spending power — so why are we so obsessed with youth?

Stefano Hatfield
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London