Now that Bob Diamond has quit as chief executive of Barclays, what does that mean for his appearance in front of the Treasury Select Committee tomorrow?
It may mean that the members of the committee tone down their attacks: it is less edifying watching a panel pillorying someone who has just resigned than someone who is refusing to do so.
But more importantly, it may mean that Diamond now feels free of his shackles and goes after other people he feels were complicit in the Libor scandal.
So who else could be in his line of fire?
- Paul Tucker. US regulators said in their reports that Barclays staff were under the impression that the Bank of England was aware that banks were systematically manipulating Libor, and worse, wanted Barclays to do the same to reduce lending rates. The DoJ even mentions one particular call between Diamond and Paul Tucker, the Bank’s deputy governor and favourite to succeed Sir Mervyn King as governor, where that impression may have been formed. If Tucker said anything explicitly along those lines to Diamond, the former Barclays boss could easily scupper his chances of getting the top job.
- Sir Mervyn King. If the deputy governor did know what was going on, it is reasonable to ask what the governor himself knew. Sir Mervyn joked in 2008 that “Libor is the rate at which banks do not lend to each other.” Was that a joke about a lack of lending or a joke about the reliability of Libor?
- Angela Knight and Stephen Green. Knight and Lord Green were at the time the chief executive and chair, respectively, of the British Bankers’ Association, the body that is responsible for setting Libor. What does Diamond know about what they knew, or what they should have known?
- Adair Turner. Tucker’s main rival for the BoE job may not survive tomorrow’s session unscathed either. Lord Turner was appointed FSA chief in May 2008, when Libor manipulation was still happening. Why didn’t the FSA act sooner? Does Diamond have some tales of regulatory incompetence that could hurt Turner and his underlings?
- Shriti Vadera. The Mail reported this morning that Baroness Vadera, one of Gordon Brown’s chief economic advisers, had written a paper in 2008 arguing that “getting Libor down is desirable”. This is to a large extent a statement of the obvious – getting Libor down was obviously desirable to get banks lending again. But did Labour want so badly to get banks to reduce their rates that they turned a blind eye to manipulation?
- Alistair Darling. As chancellor at the time, what did Darling know about what was going on at the top of Britain’s biggest banks? If nothing, should he have?
- Other banks. About 20 other institutions are currently embroiled in the Libor investigation, but no other chief executive has resigned. If Diamond knows that other bosses were complicit in manipulating rates, his could be just the first of many heads to roll.
UPDATE: The answer to the question in the title appears to be yes: http://blogs.ft.com/westminster/2012/07/the-memo-that-puts-the-ball-back-in-bank-of-englands-court/