What are we looking for when Bob Diamond, the ousted Barclays boss, testifies in front of the Treasury Select Committee today? Here are a few things the committee members might like to ask:
* Diamond’s memo yesterday revealed details of his phone conversation in October 2008 with Paul Tucker, deputy head of the Bank of England. It appears to reinforce the idea that the Bank wanted Barclays to submit lower figures for Libor. MPs will ask the former Barclays CEO precisely what Tucker said and whether the memo is an entirely accurate transcript of Tucker’s words.
* MPs will ask whether Tucker told Diamond the identify of the powerful “Whitehall” figure or figures who supposedly wanted Barclays to lower its Libor submissions in line with other banks. The Tories have leapt on this, suggesting that it points towards Labour ministers and advisers of the time: but what if it was a Treasury mandarin?
* They will ask whether he may have entirely misunderstood Paul Tucker: former ministers who have worked with Tucker tell me he is the consummate professional and is unlikely to have urged inaccurate submissions on such an important issue.
* How did this conversation then get transmitted to junior staff at Barclays, who believed they were acting on the orders of the Bank of England (a “misunderstanding” or a “miscommunication“, according to the FSA’s judgment on the affair)? What did Diamond then tell Jerry del Missier, who this week stepped down as Barclays chief operating officer.
* But MPs are keen not to be distracted by the Diamond memo and end up talking only about the possible role of the UK authorities in the 2008 manipulation.”If we only talk about the last government and the Bank of England we would be falling for a trick,” says one of the committee members.
* The submitting of false Libor figures by Barclays occurred in earlier years and for no obvious intention other than making profits for traders at the bank. The FSA found that Barclays manipulated Libor on numerous occasions between January 2005 and July 2008 because it was “motivated by profit”, as well as manipulating Euribor between early 2006 and late 2007 for the same reason. How much did Diamond know if anything? If he didn’t know, was he incompetent?
* When did he first become aware of the false numbers and did he act in any way upon warnings by compliance officers at Barclays?
* Why did Diamond decide to resign on Tuesday night after having apparently resolved to tough out the furore? What precisely did Sir Mervyn King and Lord (Adair) Turner (heads of the Bank of England and FSA) say to him? Was there also pressure from George Osborne?
* Does he intend to walk away with a payoff estimated at £20m to £30m? If so, does he anticipate any public backlash? Can he legally be restrained from taking a golden goodbye?
* The MPs may also ask Diamond whether he is aggrieved that 20 banks have been investigated by regulatory authorities around the world but Barclays is the only bank to be in the spotlight at this moment.
Jim Pickard
Kiran Stacey