Barclays Nukes The Bank Of England, And Basically Accuses It Of Being Behind Their Interest Rate Manipulation!
- Barclays Nukes The Bank Of England, And Basically Accuses It Of Being Behind Their Interest Rate Manipulation!
by Joe Weisenthal, http://www.businessinsider.com/
This morning, British investment bank Barclaysannounced that its CEO Bob Diamond would immediately resign in the wake of a massive fine over manipulating interest rates a few years ago. Specifically, Barclays has been accused of submitting false numbers about the rate at which it was borrowing money, skewing LIBOR (which is an index measuring the rate at which banks borrow money).
Diamond will be at a government hearing tomorrow, and in preparation for that, Barclays has submitted a stunning letter to the government, basically accusing the Bank of England of being the real conspirator behind the interest rate manipulation scheme.
More specifically, the bank says that its CEO Bob Diamond had a conversation with BoE deputy governor Paul Tucker, wherein Tucker inquired why Barclays was submitting rates so high compared to other banks. This conversation was relayed to one of Diamond’s lieutenants Jerry del Missier, who apparently concluded that Barclays was being pressured by the BoE to lower their number.
There are two big implications that are interesting: One is the obvious accusation that the BoE pressured Barclay’s to lower its stated borrowing rate. The other is the implication that EVERY other bank was doing the same thing, since the gist of the call between Diamond and Tucker was that Barclays needed to get into line with the other banks.
Here’s the section of the letter. You can download it here.
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