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:
- 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
- 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
- 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:
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
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.
- 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.”
- Was Libor considered an ideal measure of interbank lending, even before the rigging revelations? Nope.
- Is the FSA board engaged in contingency plans should Libor collapse? Yes.
Thanks for reading. See FT.com through the evening for anaylsis of Tucker’s words. Tomorrow its the turn before the committee of Marcus Agius, Barclays’ outgoing chairman. Read more
The always self-depracating Alistair Darling* remembers today how he arrived in the Treasury without any inkling of the global crisis about to hit financial markets. I like the quote, not only because he is kind about the FT but also because it’s an insight into just how much of a shock the credit crunch was to many policy-makers.
When I was appointed Chancellor in the summer of 2007, I gave my first interview to the Financial Times – a paper for which I have the highest respect. Read more
This may be pertinent after the Tory promise to pay for its National Insurance cut with efficiency savings across Whitehall. The quotation speaks for itself: David Cameron, May 19, 2008:
The government ‘efficiency drive’ is one of the oldest tricks in the book. The trouble is, it’s nearly always just that – a trick. In fact it’s such a cliché, there was an episode of Yes Minister about it, called ‘The Economy Drive.’ Ministers are summoned, officials instructed, the media prepared for sweeping savings in the running costs of government. And then, a few months down the line, the sheepish-looking ministers and officials come back and say ‘well actually, it wasn’t quite as straightforward as we’d hoped, Prime Minister.’” Read more
Clearly the Conservatives felt the need for a new, more positive policy and have come up with the old Tory favourite: a tax cut. George Osborne has just spelled out a pledge to partially reverse a 1 per cent rise in national insurance due to take place in one year’s time. It is likely to be welcomed by some business groups. Read more
A curious rumour reaches my ear: that David Davis, former shadow home affairs secretary, could have his eye on an altogether different prize – chairmanship of the Treasury Select Committee. Read more
It was all just a dream.
You may have thought that the Tories were the party of fiscal probity. You may have thought that they were the ones who were going to get a grip on Britain’s desperate public finances. They were the ones who would prevent the loss of the UK’s AAA credit rating and keep interest rates low. Etc, etc, etc. Read more
There was a surprise fall in unemployment by 7,000 to 2.46m announced yesterday by ONS. That means an unemployment rate of 7.8 per cent, compared to 10 per cent in the eurozone and the US.
Admittedly there could be further rises, not least when interest rates rise and the government takes an axe to public sector jobs. Read more
Pimco, one of the world’s biggest bond funds, have followed up their decision to cut back on UK gilts by publicly deriding Labour’s existing deficit reduction plans. If Gordon Brown sticks to his plans, Pimco think there is an 80 per cent chance of a downgrade.
The irony of this is of course that Ed Balls’ brother Andrew (another fine former FT journalist) is currently in charge of managing Pimco’s European portfolio. Read more
I’ve just emerged from a stuffy Westminster room where Philip Hammond gave another of his “Doing More With Less”-type speeches.
His key point – apart from a new centralised property agency to rent out Whitehall back to the civil servants – was the claim that £60bn could be saved through greater productivity performance. Read more
An astonishing tale emerged this morning as Bank of England executives faced the Treasury select committee.
It transpired that the BoE extended secret emergency financing to RBS and what was then HBOS during the banking panic in October 2008, indicating the two banks were even closer to collapse than had been thought.
There has been another flurry of speculation in Westminster over the risks to the UK’s AAA rating. Britain is only being spared from a downgrade because the sovereign credit rating agencies expect the Tories to be elected, at least according to Fraser Nelson and others. It’s an interesting argument — so interesting that I thought it was worth asking the credit ratings agencies directly. Here is my Q&A with Brian Coulton, Head of EMEA Sovereign Ratings at Fitch.
Q: Is the expectation of a Conservative victory at the general election a significant factor in calculating the UK’s sovereign credit rating? Read more