Tom Burgis

Welcome to our live coverage of Marcus Agius’ testimony to MPs. The outgoing Barclays chairman faces questions on rate-rigging by the bank’s traders and his defence of Bob Diamond. By Tom Burgis and Ben Fenton in London. All times are London time.

12.53 That’s that for our live coverage of Agius’ evidence. That was brutal — even if the outgoing Barclays chairman somehow contrived to compare himself to Donald Rumsfeld and his bank to Roger Federer.

Three key nuggets from what we heard today:

  1. After points in Agius’ testimony contradicted Bob Diamond’s comments to MPs, some members of the Treasury select committee are convinced that Bob Diamond misled them
  2. Diamond will walk away with £2m in salary and cash in lieu of pension, inlcuding being paid double his contractual entitlement of six months’ notice. He has waived bonuses worth up to £20m
  3. FSA chairman Lord Turner wrote to Agius in April and told him that the regulator’s “cumulative impression” is that “Barclays has a tendency continually to seek advantage from complex structures or favourable regulatory interpretations”

12.41 Here’s a last thought from Chris Giles, the FT’s economics editor:

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12.37 And with that, after two and a half hours in the hot seat, Agius is ejected into the Thames allowed to depart. Read more

Tom Burgis

Welcome to our live coverage of Paul Tucker’s testimony to MPs probing the Libor scandal. The deputy governor of the Bank of England faces questions about his actions at the height of the financial crisis. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents. All times are London time.

19.00 That’s that for our live blog. There are three main points from Tucker’s testimony.

  1. Did Labour ministers lean on him to get banks to lower Libor in the middle of the financial Crisis, as alleged by George Osborne? “Absolutely not.”
  2. Was Libor considered an ideal measure of interbank lending, even before the rigging revelations? Nope.
  3. Is the FSA board engaged in contingency plans should Libor collapse? Yes.

Thanks for reading. See through the evening for anaylsis of Tucker’s words. Tomorrow its the turn before the committee of Marcus Agius, Barclays’ outgoing chairman. Read more

Jim Pickard

For weeks there have been rumbling tensions about the implementation of the Vickers reforms after the FT first revealed that they may not be completed until as late as 2019.

We splashed this morning on how there will indeed be no major restructuring until after the 2015 general election – after Vince Cable accepted that it would be impossible to implement such major reforms before then. (Although the legal framework will be put in place during this Parliament.)

This would reinforce the Treasury’s insistence all along that there was no major Tory-Lib Dem split over the issue.

So who was responsible for creating the impression that the Lib Dems were adamant on immediate reforms to the banking sector to split retail from investment activities?

Step forward Lord Oakeshott, former Treasury spokesman for the party in the upper chamber, who said in the Evening Standard a few weeks ago:

“What would not be acceptable is for Vickers to come out with a radical solution and then the government not to implement it immediately and in full…Every Liberal Democrat from top to bottom is united about that. It will be absolutely criticala Lib-Dem red line, bottom line, sine qua non – whatever you want to call it. That will be crunch time for the Coalition. If the Vickers Report is kicked into the long grass, it will be curtains for the Coalition.

In mid-August Oakeshott was interviewed again, this time by the FT, where he made the same point again:

Can anyone in the Treasury or the banks seriously suggest we kick Vickers’ reforms into the long grass until 2019? When Vickers reports, our

 Read more

Jim Pickard

We have done more coverage of Clegg’s proposed bank shares giveaway to 46m members of the public in tonight’s FT. The City is quite cautious about whether the whole idea is practical.

But there could be a fees bonanza if it goes ahead, with administration costs estimated at about £200m, according to some experts. Read more

Jim Pickard

Stephen Hester has warned that ring-fencing banks could create systemic risk in the system, the opposite of its desired effect. The chief executive of Royal Bank of Scotland is currently being grilled by the Treasury select committee in Portcullis House, Westminster.

The question is pertinent because some form of internal ring-fencing is the recommendation of the Independent Commission on Banking.

It was put to Hester by Andrew Tyrie, chairman of the committee, and the bank chief at first prevaricated. Put on the spot, he said his belief was that, on balance, ring-fencing would cause problems. Read more

Jim Pickard

If you haven’t seen the Barclays pay story on the front of the FT it’s worth having a read.

The co-head of Barclays Capital, who won a bonus of £9.9m for 2010, was also awarded a long-term incentive plan for that year of £3.35m. At the same time he also received £30m of shares released under prior incentive plans. Read more

There’s been some chatter in the City about David Cameron’s trip to the Gulf being part of a cunning plan to sell the taxpayer’s bank stakes. Read more

How transparent is Merlin? George Osborne says it will make London the most transparent financial centre in the world on remuneration.

But that won’t mean the public will be able to gawp at the pay packages of the top earners at Britain’s biggest banks. Watch out for Merlin’s sleight of hand. Read more

Jim Pickard

One Tory MP buttonholed me this morning to ask why the FT this morning carried a story about the donations from the Square Mile to his party. (Donations from financiers and City firms now account for more than half the £22.5m the Conservatives attracted last year.)

You should hardly be surprised by now that your readers support our party,” he observed.

Up to a point, Lord Copper. Yes, the City has always backed the Tories (with a temporary swing away during the peak of New Labour) while the unions are the cornerstone of Labour.

Plus the proportion of City money going to the Tories has actually fallen from 52 per cent in 2009 to 51 per cent last year, if you look closely at the figures in the report by the Bureau of Investigative Journalism.

But the underlying trend is still worth reporting (it’s also the splash in the Guardian) as it shows a medium-term rise in the proportion of funding from city sources – up from just 25 per cent in 2005. Read more

In opposition one of Vince Cable’s favourite pastimes was taunting Barclays and Bob Diamond, their investment banking chief. Read more

Kiran Stacey

Vince Cable faces some tough choices on getting banks to lend

Vince Cable

Government officials told the FT over the weekend that today’s bank lending paper would be “very green” – essentially laying out a set of problems rather than solutions. And so it has proved.

The first 12 out of 39 pages deal with “context”: basically facts we already knew. It is not until page 13 that we get any concrete policy suggestions. And even then, they are couched in very cautious terms. Read more

Jim Pickard

Baffled and perplexed by plans to shake up NHS - Philip Stephens in the FT
Lansley is in a hurry and may lose control - Nick Timmins in the FT
I was always thinking straight unlike some colleagues - Mandelson serialisation continues in Times
Short jail sentences are pointless – David Cameron in Daily Mail
Many Tories hate David Cameron – Tim Montgomerie at ConservativeHome
Mark Hoban mulls tax on bank profits – FT

From FT Alphaville:

Here’s something of a surprise:

A fairly muted reaction (at pixel time anyway) from the UK banking sector to the new ConDem coalition.

Surprising because the Conservatives look likely adopt the aggressive anti-bank policies of the Liberal Democrats manifesto (although everything is subject to negotiation in this new collaborative age). Read more

Jim Pickard

I woke up to the dulcet tones of David Blunkett warning that a Lib-Lab coalition may not be quite the panacea that Lord Mandelson and others seem to think. “I believe it will lead to a lack of legitimacy. The British people will feel we have not head what they said to us,” the former home secretary warned.

“What would I have felt if Jeremy Thorpe had cobbled together a coalition with Ted Heath,” he said on the Today programme. “What would people have said?” (He also said the Lib Dems were “behaving like every harlot in history.”)

Tom Harris, Labour’s best (and arguably only readable) MP blogger, wrote this morning that the idea of a progressive coalition was looking somewhat desperate:

The word “progressive” has now been redefined as “willing to barter away everything you campaigned for in return for the chance to be in government, albeit at the beck and call of a party that has spent its entire existence trying to wipe you off the political map”. Who knew?

I’m equally incredulous about the attempts to cobble together up to seven parties (including the Greens’ single MP) to hold off the Tories at any cost. Not least because one pro-coalition cabinet minister told me at 5am on Friday that the game was up: “The arithmetic just isn’t going to work,” that person told me in the sleep-deprived early hours. Read more

If coming third in the polls and a seemingly collapsing campaign strategy wasn’t causing enough stress within the Labour party, a Labour parliamentary candidate from North west Norfolk has called Gordon Brown “the worst prime minister we have had in this country”.

According to the Lynn News newspaper, Manish Sood, who is contesting a Tory-held seat, said: “I believe Gordon Brown has been the worst prime minister we have had in this country … It is a disgrace and he owes an apology to the people and the Queen.” Read more

Jim Pickard

What will damage Gordon Brown over today’s unfortunate encounter is that Mrs Duffy – it transpires – seems to be far from the ignorant “bigot” that Brown labelled her.

Bewildered by her encounter with the prime minister, she said that all she wanted to know was “why I was called a bigot.” Mrs Duffy, in her own dignified way, said that Mr Brown was an “educated person” who should have known better. Read more

Jim Pickard

The problem with any plot involving Mandelson installing David Miliband into the Labour leadership is very familiar. It’s the sticking point which held back Brown’s enemies during the last three or four attempted coups against him.

It is this: the rules around Labour leadership elections are very complicated, especially if the incumbent refuses to step down. Even if Brown was to walk voluntarily there would still have to be a democratic election within Labour for his replacement.

You may remember that the Parliamentary Labour Party only has a third of the vote. Another third goes to the grassroots. The final third is the unions: and the barons are already unhappy at the idea of the Blairite wing of the party fixing the contest in advance. Read more

Jim Pickard

JP 11.27pm Time for my last attempt at sober analysis of the debate and the aftermath.

What matters ultimately is who came out on top between Cameron and Brown. After all, the Lib Dems have no chance in the majority of seats in the general election. They may still be glad to increase their number of seats from the current 63. Those are the basic facts.

If the preliminary reports are correct – that Cameron was significantly ahead of Brown – that may, ultimately, turn out to be crucial.

Regardless of Clegg’s moment in the sun (“Clegg the outsider seizes his moment in the TV spotlight” is the Guardian front page tomorrow. And “shock victory for Clegg” is the Daily Mail.) It’s still about blues versus reds. Read more

Jim Pickard

What to make of Brown’s new mea culpa over bank regulation in the run-up to the crash?

The prime minister has told ITV (in a programme to be screened tonight at 7.30pm) that in the 1990s the banks begged to be free of regulation and Labour in effect accepted this.

It’s a striking confession. Until now Brown has usually sought to shift the blame on to failures of international – rather than national – regulation of financial markets. And of course he has insisted that the credit crunch was imported from the US.

Alistair Darling has also blamed the banks instead of the regulators as recently as last summer. Read more

Nick Clegg has put a lot of effort into assuaging City nerves over a hung parliament. Britain’s credit rating will be safe in Lib Dem hands, he insists. But, even if that is true, Britain’s investors and bankers will still be poorer for it. Given half the chance, Clegg and Vince the Bonus Snatcher want to plunder the City, break up the big banks and mount Gordon Gekko’s head on a spike.

In Westminster it’s open season on bankers. Osborne, Mandelson — everyone has had a pop. But the Lib Dem plan unveiled today is the high-watermark, the Daddy of all City crackdowns. Most bankers will probably be thinking: Why should we care? Well, if there is a hung parliament, these reforms will be one of the top four Lib Dem priorities. Read more