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Ex-Barclays CEO To Appear Before British Panel
Originally published on Wed July 4, 2012 5:52 am
LINDA WERTHEIMER, HOST:
NPR's business news starts with a U.K. interest rate probe.
(SOUNDBITE OF MUSIC)
WERTHEIMER: The former chief executive of Barclays is testifying before a parliamentary committee in Britain. Bob Diamond, who resigned yesterday, is being asked about the rate-setting scandal at the bank. He told lawmakers in the hearing today that it was an unfortunate series of events. Yesterday, Barclays released documents suggesting a Bank of England official may have pressured Barclays to lower its rates. NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: Barclays is one of many banks that regularly submit estimates about their borrowing costs. Those estimates are then used to calculate the so-called London Interbank Offered Rate, or LIBOR, which is used to set interest rates around the world. Last week, Barclays was fined more than $450 million after acknowledging that the borrowing costs it reported were not accurate and that its employees were trying to manipulate LIBOR. The scandal has already forced the resignations of three top Barclays's executives, including Diamond. Yesterday, the bank struck back at some of the press coverage it has received. It released notes of a conversation between Diamond and Bank of England official Paul Tucker. The conversation took place in October 2008 at the height of the financial crisis, a time when U.K. officials were anxious to convey an impression of financial stability. According to the notes, Tucker told him he didn't want to give the bank advice, but he said the numbers do not always have to be as high as they have been recently. Barclays says some bank executives took that to mean the British government was urging the bank to submit information it knew to be false in an effort to hold down surging interest rates. Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.