Bank of England's Tucker denies role in rate-fixing

Mon Jul 9, 2012 4:22pm EDT
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By Alessandra Prentice and Steve Slater

LONDON (Reuters) - The Bank of England's deputy governor, Paul Tucker, strongly denied suggestions on Monday that government ministers had pressured him to encourage banks to manipulate interest rates in a scandal gripping Britain's financial sector.

A row over how much top officials knew about the rigging intensified as Tucker appeared before a parliamentary committee as part of its investigation into Barclays (BARC.L: Quote) and other banks suspected of manipulating a key interbank lending rate.

Barclays has been fined more that $450 million for its part in manipulating Libor, the interest rate that is the global benchmark for transactions worth billions of dollars.

Softly beating the surface of the table with both hands for emphasis, he flatly denied - repeating "Absolutely no" several times - that any minister had ever urged him to influence Barclays or other banks over the rates. He said he was unaware of any rigging.

"This was a cesspit," he said of the Libor manipulation, gazing over the top of his eyeglasses at the lawmakers of the House of Commons Treasury Select Committee. "We were not aware of it, other than what is starting to come out in these investigations. We didn't have any knowledge, I didn't have any knowledge."

"Such collusion would never have occurred to me until the revelations of the last few weeks," he said during his evidence, sometimes shoving both hands in his pockets when defending himself against criticism from the committee.

The scandal - complete with emails showing bankers boasting of manipulating interest rates and congratulating each other with offers of champagne - has triggered fierce criticism about the financial industry in general and Barclays in particular.

Barclays chief executive Bob Diamond was forced to resign last week, paying the price of a scandal that is expected to drag in other international banks.   Continued...

Deputy Governor of the Bank of England, Paul Tucker, attends the Financial Reform Conference co-hosted by the South Korean government and the Financial Stability Board (FSB), in Seoul September 3, 2010. REUTERS/Lee Jae-Won