Tucker to face MPs

9th Jul 2012 11:00

The Bank of England's deputy governor Paul Tucker will face MPs today over his role in the LIBOR fixing scandal, which led to the resignation of Barclays' Chief Executive Bob Diamond.After Diamond escaped the Treasury Select Committee last week having revealed virtually nothing new, expectations of an explosive performance by Tucker have been moderated.Today's questioning will centre around a conversation between the two men that is seen as crucial to unravelling what drove the LIBOR scandal that has engulfed the banking system.LIBOR - which stands for London Inter-Bank Offered Rate - is a key benchmark that indicates how much banks are having to pay to borrow money from one another.Notes released by Barclays show that in a phone conversation in October 2008, Tucker told Diamond that "senior figures within Whitehall" were concerned at the high level at which Barclays was submitting its LIBOR rate.Diamond told MPs he had not taken this to mean Barclays should artificially lower the rate.The committee's chairman, Conservative MP Andrew Tyrie, retorted that to "almost anyone who looks at it", it appeared that Tucker was giving Diamond "a nod and a wink" to lower rates.However, Barclays' Libor submissions were subsequently lowered with Diamond saying the bank's then-chief operating officer, Jerry del Missier, had misinterpreted this conversation as an instruction from the Bank of England to lower the rate.Diamond also denied he had any knowledge of who the senior Whitehall figures mentioned by Tucker, who is seen as a potential successor to Governor Mervyn King, were.The LIBOR scandal has given MPs fresh impetus to attack the financial sector.Over the weekend Labour called for banks to be forced to sell off large numbers of branches to allow new entrants into the market.Business Secretary Vince Cable accused banks of 'throttling' a recovery by not lending enough to business.