UK legislators grill former Barclays official
Jerry Del Missier says he was merely acting under orders when he asked his staff to manipulate interest rates.
Last Modified: 17 Jul 2012 06:14

One of the key figures in the Barclays Bank scandal says he was merely acting under orders when he asked his staff to manipulate interest rates.

Jerry del Missier was giving evidence at a parliamentary inquiry in London on Monday.

Del Missier told the inquiry that he was instructed by the former Barclays chief executive Bob Diamond to manipulate the bank's Libor interest rate submissions. 

The scandal revolves around the London Interbank Offered rate, or Libor, which affects trillions of dollars worth of financial transactions. It also influences everything from mortgages to student loans and credit cards.

Last week, Diamond told British parliamentarians that  regulators had been happy with the "tone at the top" of the bank.

Diamond's evidence however appeared to differ from del Missier's, who quit as Barclay's chief operating officer.

Asked if a 2008 phone call from his former boss was an instruction to cut the Libor rate submissions, del Missier said "yes it was".

Barclays has said del Missier told his traders to lower Libor following a misunderstanding over an email sent from Diamond.

The email had summarised a call between Diamond and Paul Tucker, deputy governor of the Bank of England.

Del Missier told the enquiry MPs he acted on the basis of a phone call from Diamond. "It was an instruction, yes," he told the enquiry.

"I took the action on the basis of the phone call that I had had with Mr Diamond," del Missier said.

"He [Bob Diamond] said that he had a conversation with Mr Tucker of the Bank of England, that the Bank of England was getting pressure from Whitehall around Barclays, the health of Barclays as a result of Libor rates and that we should get our Libor rates down and that we should not be outliers.

"I passed the instruction on to the head of the money market desk... At the time it did not seem an inappropriate action given that this was coming from the Bank of England." del Messier said.

Asked how he could have confused Diamond's conversation, del Missier said: "I can only tell you what I clearly recall from the conversation."

Barclays and other banks are suspected of manipulating the rate either for profit, or to make them look stronger financially.

The US and UK have already fined Barclays more than $450m.

In a separate development, British parliamentarians have also agreed to set up a parliamentary commission on banking standards to investigate the Libor rigging scandal to report by December.


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