As for what really happened with the phone conversation, this sounds like typical plausible deniability from the top. Paul Tucker said something like “it did not always need to be the case that Barclays appeared as high” according to somebody “senior”. (You have to wonder who is so “senior” at such levels that they can’t even be identified.) Bob Diamond “did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier.” I’m sure that Jerry del Missier conveyed effectively to his subordinates that certain things might be desirable, without actually telling them to do it. When people at the top want something done that happens to be illegal, as it’s said above, they don’t write a memo saying “Please fix LIBOR, in contravention of section X of act such-and-such”. Of course they say something that might sound like they didn’t mean at all to break the law. You don’t get to the top if you are a complete idiot, and only a complete idiot would do that.

Most of the other CEOs at the other banks have gone now too,so that will likely be the end of heads rolling.Though no bank will ever get over the loss of trust the public now has in them.

Re the pre-crisis manipulation of LIBOR, the BBA deliberately excludes the several highest and lowest LIBOR submissions in an attempt to make such manipulation harder. Doesn’t that suggest that the traders at Barclays trying to move LIBOR had contacts at other banks to make sure it would work? I expect that the ongoing investigations of other banks will find similar behavior elsewhere.

Re LIBOR being a “made-up” number during the crisis, I believe that was the case pre-crisis as well. While in normal times there might be a market basis for the overnight LIBOR, my understanding is that 1-month, 3-month, 6-month, and 1-year LIBOR were largely or completely estimates well before the crisis since there was little if any unsecured interbank lending in those maturities. These estimates might have been a little better because they applied a yield curve to a real overnight LIBOR number, but they still weren’t actual market numbers.

Lastly, LIBOR is hardly alone in being a basically “made-up” rate that impacts lots of loans. The “Prime Rate” isn’t tied to any real market measure. It usually moves with the Fed Funds Rate but doesn’t have to do so. At this point it has no real definition – banks just state “x% is our Prime Rate”. It’s not as widely used as LIBOR, but lots of small business loans, credit cards, ARM’s, and HELOC’s are indexed to the Prime Rate.

But you can’t have a brain and not realize that the BoE (Bank of England – just like our FED) is the LEADER of Satan’s angels, if not Satan himself.
All these central banks do is bail out their children, the private banks. They refuse to enforce banking laws, and they refuse to regulate effectively. ALL they want to do is save banks (which the MARKET has shown are run by frauds and incompetents – and if we had a competent and honorable DoJ, criminals as well) – and of course, this means manipulating interest rates as well. Do you expect a memo from BoE stating “you are required to manipulate LIBOR contrarty to section (applicable law)?”

Of course the BoE, as well as the FED will do ANYTHING to save banks. They think that what is good for the banks is…well, good for the banks and f*ck everybody else.

the published emails fingered barclay’s corruption and its gratuitous kiss-butting favours for the “big boy” insiders

time to look forward to the ECB’s new Target2Securities platform

and away from those LIBORious snakes

If Diamond goes down for conspiracy, his conviction will have nothing to do with anything concerning the BoE’s desire to calm markets during the period of turmoil. Embarrassing the Bank is Barclays’ attempt at creating a Mexican-standoff situation, in an effort to avoid criminal prosecution. It might work.

Of course, as a Civil Service organisation, the BoE will almost certainly have notes about everything; bureaucrats are like that. They also don’t easily publish their notes in the press… their job is to keep secrets, not to broadcast them.

Specifically, it has worked ever since the dot com era, which is the last time it was tried in court, at which point it was found not to work.

[The only record we have of this conversation is Diamond’s. Absent any testimony from Tucker, we should take that at face value]

If you use this as a general principle for assessing the veracity of statements in financial cases, you are going to end up owning a lot more bridges than you have any real use for. In any case, if we are going to take this at face value, shouldn’t we also take at face value Diamond’s specific statement that Tucker did not tell him to lower the quotes?

Felix says “Tucker was clearly just saying that Barclays should work with those other banks to get that rate down” which sounds an awful like collusion to me and obviously illegal (in the US at least).

Further on Felix says that he thinks Tucker was simply telling Barclays to “improve its reputation with other banks, so that they would lend to Barclays at lower rates”. Again that sounds awfully naive, as the bbc says the Bank of England surely knew that the interbank lending market was dead, they were intermediating those flows as a consequence. They also certainly understood that other banks were throwing in lowball numbers simply to avoid looking stressed. Tucker also surely knew there were no short term ways “to get their act together”, in the middle of the crisis you are either insolvent in which case nothing is going to save you or you are illiquid in which case appearances matter a whole lot. Appearing less stressed, if credible, is a way to avoid a liquidity crisis. This gets to the numerous “scandals” about Fed transparency etc… Sometimes too much information can spark a rational bank run, if your the Bank of England it might have been reasonable to suggest that Barclays not appear to be the most stressed bank on the street.

http://www.bbc.co.uk/news/business-your- money-18701623

** ponders the distinction between ‘naïveté’ and ‘disingenuousness’ **

What you may be missing as background is that between fall 2008 and early 2009 everybody in a banks trading floor knew that Libor was being manipulated. The interbank market had ceased to exist, since nobody was lending to anybody. In that situation, all quotes submitted were guesstimates. It was understood that there was strong pressure from above, with regulatory blessing, to submit low guesstimates as opposed to high ones. The regulators were pretty desperate too – there is no point in having a super low benchmark rate if the rate everybody uses to calculate lending costs stays sky high. It was imperative that Libor follow Fed Funds down, and it did – even though there was no actual inter-bank lending happening. For Mervyn King to throw Diamond to the wolves now is really really rich.