Barclays Kinda-Sorta Claims Bank Of England Told It To Manipulate Libor
"First, a quick refresher: Libor is an interest rate that is used to
set loan rates around the world, including here in the U.S., including
adjustable mortgage rates and auto loans. A handful of big banks set it
every day by announcing what they're having to pay to borrow in
short-term lending markets.
It's way too easy to manipulate the rate -- just tell the world
whatever number you want. In fact, just about everybody else was
probably manipulating the rate, too. There are allegations that, during
the crisis, many banks conspired to push Libor too low, to make it look
like they weren't having any trouble borrowing money, when, in fact, the
market was closing up on them. Lots more banks may be about to get in
trouble over this....
But for now Barclays is alone in the hot seat. On Tuesday, just ahead
of a scheduled appearance on Wednesday by Diamond before a
parliamentary committee investigating the scandal, the bank produced a
brief explaining its side of the story. Included in that brief is an
email written by Diamond on October 29, 2008, noting a phone
conversation he had that day with Paul Tucker, a deputy governor of the
Bank of England, the UK's version of the Federal Reserve."
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