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

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The Independent Online

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.