Page last updated at 18:32 GMT, Monday, 16 July 2012 19:32 UK

Treasury Committee

A former Barclays director has told MPs he was instructed to lower Libor rate submissions by his then boss, Bob Diamond.

Testifying at the Commons Treasury Committee on 16 July 2012, Jerry del Missier, who quit as chief operating officer, said he believed the Bank of England had sanctioned the move.

He told the panel of MPs he reached this conclusion after a conversation with Barclays chief Mr Diamond in 2008.

Testifying at the committee two weeks ago, Mr Diamond said he did not believe the Bank of England had instructed the bank to lower its Libor submissions and had not instructed Mr del Missier to do so.

Last month, Barclays suffered penalties of £290m after it admitted trying to manipulate a key inter-bank lending rate, known as Libor, from 2005 to 2009.

Mr del Missier said he passed on the instruction to lower the bank's interest rate submissions to the head of the money markets desk, but did not check up to see what effect the action had.

"I took the action on the basis of the phone call that I had with Mr Diamond.

"He [Bob Diamond] said that he had a conversation with Mr Tucker of the Bank of England, that the Bank of England was getting pressure from Whitehall around Barclays, on the health of Barclays as a result of Libor rates and that we should get our Libor rates down and that we should not be outliers."

Mr del Missier said "it did not seem inappropriate" at the time "given that it was coming from the Bank of England" but conceded that in retrospect it was improper.

Later on, the committee heard from the chairman of the Financial Services Authority (FSA), Lord Turner, who appeared alongside other FSA representatives.


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