NEW YORK—Former Barclays Plc Chief Operating Officer (COO) Jerry del Missier on Monday testified in front of Parliament’s Treasury Select Committee that his former boss, Bob Diamond, instructed him to low ball the bank’s Libor submissions, based on a conversation Diamond had with the Bank of England.
Del Missier recalled that at the time he believed the instruction was coming from Bank of England regulators who thought Barclays’s submissions were higher than other banks, thus raising questions of Barclays’s overall health.
He then passed the message on to the head of the money markets desk. Del Missier’s testimony differed from Diamond’s, who earlier testified that he did not instruct del Missier to lower the bank’s Libor submissions.
Del Missier admitted that he did not seek further guidance—either from legal or compliance—stating that those were extraordinary times for the banking industry.
Del Missier’s testimony also implicated other Barclays executives, including Stephen Morse, the bank’s compliance head, who del Missier says never acted to stop the false Libor submissions after del Missier told him about them.
The London-based bank was recently fined 290 million pounds ($453 million) to settle allegations that it had under-reported its Libor submissions. Libor is a benchmark interest rate determined by submissions of more than a dozen banks, indicating the borrowing rates banks use to loan money to each other, and from which interest rates on products such as loans, mortgages, and credit card rates are determined.
The fallout of the scandal has been huge; former chief executive officer (CEO) Bob Diamond and former Chairman Marcus Agius lost their jobs. Agius is remaining at the company to lead a search for the new CEO.
In a separate testimony, Diamond defended the bank’s actions. He told lawmakers that Paul Tucker, now the deputy governor of the Bank of England, had relayed to him that England’s top lawmakers felt the bank’s Libor submissions didn’t need to be always so high.
In his own testimony, Tucker said that he did not instruct Barclays to lower its submission, he just wanted to make sure the bank “didn’t march over a cliff” at the height of the financial crisis.
Now, if all parties are to be believed, there was a severe case of misunderstanding. It is to be noted that up to 10 other banks—including Royal Bank of Scotland and UBS—are currently under investigation for similar charges.
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