Bank of England's Paul Tucker faces grilling over Libor affair
The deputy governor of the Bank of England Paul Tucker will attempt to clarify his involvement in the rate-rigging affair today after being dragged into the scandal by former Barclays boss Bob Diamond.
Mr Tucker, a forerunner for the top position at the Bank when Sir Mervyn King steps down, faces a series of questions from MPs on the Treasury Select Committee over alleged conversations he had with Barclays on the key interbank lending rate known as the Libor.
Emails released by the Bank of England today show that Mr Tucker requested a meeting with Mr Diamond in October 2008 to discuss Libor.
John Mann MP received records of the emails following a Freedom of Information request to the Bank of England. He has said that the Bank may be in contempt of Parliament for not releasing the emails sooner.
The deputy governor found himself in the spotlight after Mr Diamond disclosed a memo of a phonecall between the two men, in which Mr Tucker appears to imply that Barclays should submit lower Libor submissions:
In his appearance before the Treasury Select Committee, Mr Diamond said he "didn't feel it was an instruction" to lower the Libor rates, but that he was left "confused" by the conversation.
See ITV News' Political Editor Tom Bradby's report:
He said there were 14 or 15 other banks, including nationalised lenders such as Royal Bank of Scotland, who he knew had a weaker financial position than Barclays and were still submitting lower Libor rates.
Outlining his interpretation of Mr Tucker's comments, he said: "He felt that our Libor rates, relevant to the other 15 posters, could be lower."
Mr Tucker will be questioned about whether figures within the Bank of England were aware that rate-rigging was going on, and if not, whether they took their eyes off the ball.
Attention will also focus on who the "senior figures within Whitehall" cited in the memo refer to. Mr Diamond refused to "speculate" on their identities.
Meanwhile, the phrase has triggered a spate of finger-pointing in Whitehall as politicians from the Labour government of the day sought to distance themselves from the affair.
The Financial Times (£) reports that government sources have confirmed that the Cabinet Secretary Sir Jeremy Heywood was the Whitehall figure mentioned. My Tucker will probably be asked to confirm this.
Meanwhile, the Labour leader Ed Miliband delivered a speech this morning outlining how he would seek to reform ethics in banking. He pointed to the Libor rate-fixing scandal as vindication of his much-criticised attack last year on "predatory" capitalism.
He called for the 'Big Four' banks to be broken up to create more competition, and for a 'code of conduct' to govern the behaviour of bankers.
The committee will question Barclays chairman Marcus Agius on Tuesday morning. No other witnesses have been called so far.