04.07.2012
By Simon Miller
Former Treasury minister Paul Myners has denied he was the Whitehall official mentioned in an email from former Barclays chief executive Bob Diamond.
The potentially explosive email to the then-chief executive John Varley suggested that the Bank of England may have called for it to lower its Libor submission after concern from "senior Whitehall officials" over the banks' consistently high rate.
Speaking to the Today programme, Myners said he categorically denied speaking to BoE deputy governor Paul Tucker about the Libor rate-setting process.
"I don't think anyone in the Treasury under [the chancellor] Alistair Darling would have done so either. We were not interested in the Libor rate-setting process, we were interested in what was happening in the real world," he said.
Myners added that he didn't recognise what was being described by Diamond in the email but said that it would not have surprised him that the BoE had daily contact with the banks.
In evidence given to the Treasury Select Committee before Diamond's appearance this afternoon, Barclays said that during the financial crisis of 2008, it had noted that its US Dollar Libor submissions were significantly higher than other panel members. Indeed, the bank said that in October 2008 its US Dollar Libor submissions for the 3-month maturity were the highest or next highest of the panel on every single day of the month and therefore excluded from the calculation of Libor.
"Barclays did not understand why other banks were consistently posting lower submissions; Barclays firmly believed that the other panel members were not, in fact, funding at a lower cost than Barclays, and we were disappointed that no effective action was taken, notwithstanding our having raised these issues with various Authorities during the whole financial crisis period," said the bank.
According to the submission, Diamond sent an email to the then chief executive John Varley, saying that he had received a call from Bank of England deputy Paul Tucker that a number of senior figures within Whitehall had asked why Barclays was always at the top end of the pricing.
Diamond said he asked Tucker to “relay the reality, that not all banks were providing quotes at the levels that represented real transactions, his response ‘oh that would be worse’”.
According to the note, Tucker said that the level of calls from Whitehall were senior and that “while he was certain [Barclays] did not need advice, that it did not always need to be the case that [Barclays] appeared as high as we have recently”.
Myners added: "I don't think you can say that lying is in the public interest. They reflect a culture in Barclays that the chairman has acknowledged fell well short of expected standards."
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