The Bank of England stands on Threadneedle Street in London, U.K., on Tuesday, Feb. 4, 2014. (Simon Dawson/Bloomberg)
The Bank of England said on Monday it would not publish details of its dealings with banks that rigged market interest rates at the height of the financial crisis until a lengthy criminal fraud investigation has concluded.
The BBC released a recording on Monday of an October 2008 phone call between two bankers at Barclays in which one said he was under “serious pressure” from the BoE to set an artificially low rate for Libor, an inter-bank borrowing rate.
The information in the recording largely echoes facts uncovered in investigations in 2012 by parliament and Britain’s now-defunct Financial Services Authority. Those led to a record fine for Barclays and the resignation of its chief executive Bob Diamond, its chairman and chief operating officer.
The scandal involved a total of 11 banks and brokerages and raised questions about the relationship between the BoE and banks in the run-up to the crisis.
It also triggered new laws explicitly to criminalize setting inaccurate market interest rates, and a series of probes by Britain’s Serious Fraud Office which have brought five convictions and some unsuccessful prosecutions.
“The Bank is committed to publishing materials relating to the SFO’s investigations into benchmark manipulation when it is appropriate to do so,” the BoE said in a statement.
“Until the SFO’s ongoing prosecutorial activity relating to Libor and other benchmarks has concluded, the Bank is not in a position to publish these materials.”
The BoE said Libor and other global benchmarks were not regulated in Britain during the period in question.
Barclays’ then chief operating officer, Jerry del Missier, told a British parliament committee in 2012 that following a conversation with Diamond in 2008, he understood that the BoE wanted Barclays to submit artificially low reports of its borrowing costs to reduce concerns about its financial health.
Diamond and Paul Tucker, then a deputy governor at the BoE, both denied in 2012 that the BoE had given any such instruction, despite a written record that Diamond made in 2008 of a conversation between him and Tucker which partly implied this.
Diamond disputed this interpretation of his note, while Tucker said Diamond’s note-keeping was inaccurate.
Parliament’s Treasury committee concluded in 2012 that “if Mr Tucker, Mr Diamond and Mr del Missier are to be believed, an extraordinary, but conceivably plausible, series of misunderstandings and miscommunications occurred.”
A British lawmaker who sits on parliament’s Treasury Committee told the BBC on Monday that he wanted Tucker and Diamond to appear before the committee again to discuss the BBC’s recorded telephone conversation.
Diamond told the BBC: “I never misled parliament and … I stand by everything I have said previously.” The BBC said Tucker did not respond to its questions.