MPs' Libor report scathing

The influential Treasury Select Committee has concluded ex-Barclays boss Bob Diamond was "highly selective" when he gave evidence to MPs on the Libor fixing scandal, and criticised the Bank of England and the FSA for their "failings" on the matter.

Live updates

Diamond: 'Answered every question truthfully and candidly'

Former Barclays boss Bob Diamond said he was disappointed and strongly disagreed with several of the committee's statements.

"In particular, I strongly challenge certain assertions about my testimony," he said.

"On July 4, I appeared before the Committee voluntarily and on short notice.

"I answered every question that was put to me truthfully, candidly and based on information available to me.

"I categorically refute any suggestion to the contrary.

"I take particular issue with the attacks on Barclays' culture and character.

"Barclays, one of the only major UK financial institutions that did not need a rescue from the UK Government, is a tremendous institution with an over 300-year tradition of supporting economic growth and the communities in which we live and work.

Bob Diamond giving evidence to the Treasury Select Committee in July Credit: PA Wire

"I am proud of what we accomplished over the 16 years I was employed there and our prudent management of the institution helped avoid the fates that befell other UK banks in 2009.

"The picture being presented today of what Barclays stood for under my watch could not be further from the truth.

"There is no question that the behaviour of a small group of traders related to Libor manipulation was reprehensible and not in keeping with Barclays' high standards.

"At the same time, it should be recorded that broader issues with Libor have been a subject of discussion among regulators for years, and there is little dispute that Barclays was both aggressive in its investigation of this matter and engaged in its cooperation with the appropriate authorities.

"Looking forward, it's clear that thoughtful analysis and regulation of issues affecting the banking industry are required and I have no doubt that Barclays is committed to being part of the solution."

FSA: 'We will study the report's findings'

We welcome the committee's report and their view that the new judgement led approach to regulation being delivered by the FSA is the right one. The FSA has already put in place a number of reforms in recent years including a tougher fines policy for enforcement cases and a completely new model of bank supervision. We will study the report's findings and Martin Wheatley will consider it as part of his Libor review.

– The Financial Services Authority

Advertisement

Labour: 'Banking reform is needed'

In response to the Treasury Select Committee's report on Libor, Chris Leslie, shadow financial secretary to the Treasury, says the Chancellor needs to initiate banking reform.

Shadow Financial Secretary Chris Leslie. Credit: Press Association

He said: "The Chancellor needs to take significant steps in the current Banking Reform Bill and beyond if he is to rebuild public and global market confidence in the UK financial services sector.

"We know that Libor manipulation extends beyond just Barclays and we need to see the full picture as soon as possible."

Treasury 'welcomes' committee's Libor report

The Treasury has welcomed a select committee's "detailed and prompt report" into the Libor fixing scandal, saying the Government will study its recommendations "in depth".

The manipulation of key global benchmark rates has been another example of a culture of irresponsibility within the banking system, which the Government is determined to fix as quickly as possible.

The Government has already established the Wheatley Review into Libor, which published a discussion paper last week and will produce final recommendations by the end of the summer, and any necessary legislative changes will be considered for inclusion in the Financial Services Bill or the Banking Reform Bill.

– A Treasury spokesman

What exactly is Libor?

Canary Wharf Credit: Yui Mok/PA

Libor - or the London Interbank Offered Rate - measures the rate at which banks borrow from each other.

Each day, a panel of banks set out what rates they think they can borrow from others over a range of periods - from overnight up to 12 months.

The data is collated, the top and bottom estimates are removed and the rest are then averaged to give a figure.

Libor is considered to be a key gauge of the financial system's health.

Advertisement

Barclays to 'carefully consider' MPs' report

A Barclays spokesman said the bank would "carefully consider" the parliamentary committee's report into the manipulation of the London Interbank Offer Rate, also known as Libor.

The spokesman stated:

While we don't expect to agree with every finding in it, we recognise that change is required, not least to restore stakeholder trust.

That is why we have established an independent review of our business practices under Anthony Salz, and we expect that review to take full account of this report in producing its recommendations.

Libor scandal did 'great damage' to the UK's reputation

Treasury Select Committee chairman Andrew Tyrie said the evidence that was presented to his committee showed there had been failings both in internal monitoring and in regulatory supervision over Libor.

When publishing the committee's report, Conservative MP Mr Tyrie said:

The sustained rigging of a crucial benchmark rate has done great damage to the UK's reputation. Public trust in banks is at an all time low.

Urgent improvements, both to the way banks are run and the way they are regulated, is needed if public and market confidence is to be restored.

The manipulation was spotted neither by the FSA [Financial Services Authority] nor the Bank of England at the time. That doesn't look good.

MPs criticise Bank of England, FSA over Libor fixing scandal

A parliamentary committee report into the Libor fixing scandal has criticised the Bank of England (BOE) and regulatory body the Financial Services Authority for failing to spot the manipulation of the key interest rate.

The Treasury Select Committee noted that while central bank staff were aware there was a danger banks may manipulate their submissions, they did not believe this was occurring.

"With hindsight this suggests a naivety on the part of the Bank of England," the report stated.

However, the MPs cleared the BOE of directing Barclays to manipulate the rate lower, saying the British bank "did not need a nod, a wink or a signal from the Bank of England to artificially lower Libor submissions".

Load more updates Back to top

Latest ITV News reports