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Bank of England 'caught' rigging the Libor Rates

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The Bank of England was influencing the major banks setting Libor rates during the great financial crisis, a recording unveiled by BBC Panorama shows. The BBC uncovered that commercial banks were made by the Bank Of England to push the figures down in the midst of the great contemporary conundrum for global financial markets .

The recording potentially calls into question the parliamentary testimonies of former Deputy Governor of the Bank of England Paul Tucker and former CEO of Barclays Bob Diamond.

Libor rates are the basis by which commercial banks calculate interest rates on a variety of products including mortgages and Loans.

Banks have to submit the rate at which they can obtain financing from other banks. According to a conversation in the recording held between senior Barclays manager Mark Dearlove and Libor rates submitter Peter Johnson, the bank was made to report lower Libor rates by the UK Government and the Bank of England.

After Johnson objects to reporting figures that are lower than the market rates, he is told by his supervisor to report the figures lower anyway.

The call between the two occurred on the same day that Paul Tucker spoke with the then-CEO of Barclays, Bob Diamond. The BBC states that the duo discussed Libor rates during the call.

Commeting to the BBC, MP Chris Philp said: “It sounds to me like those people giving evidence, particularly Bob Diamond and Paul Tucker were misleading parliament, that is a contempt of parliament, it’s a very serious matter and I think we need to urgently summon those individuals back before parliament to explain why it is they appear to have misled MPs. It’s extremely serious.”

“The Bank of England is suppose to be assisting the Serious Fraud Office’s (SFO) criminal investigations into Libor manipulation by employees at commercial banks and brokers by providing, on a voluntary basis, documents and records requested by the SFO,” 


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