Tape ‘reveals Bank told Barclays to lower Libor’

A recording of a call between Barclays staff, uncovered by Panorama, the BBC programme, apparently reveals two people discussing an order from the Bank of England to lower the lender’s Libor submission in 2008.

“The bottom line is you’re going to absolutely hate this . . . but we’ve had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower,” Mark Dearlove, a Barclays manager, told Peter Johnson, a Libor submitter.

According to the BBC, Mr Johnson, who was jailed last year after pleading guilty to his involvement in Libor rigging, objected. “So I’ll push them [the bank’s Libor submissions] below a realistic level of where I think I can get money?” he said, according to a transcript published by the BBC.

Mr Dearlove replied: “The fact of the matter is we’ve got the Bank of England, all sorts of people involved in the whole thing . . . I am as reluctant as you are . . . these guys have just turned around and said just do it.”

The Bank of England issued a statement yesterday, saying: “Libor and other global benchmarks were not regulated in the UK or elsewhere during the period in question. Nonetheless the Bank of England has been assisting the Serious Fraud Office’s criminal investigations into Libor manipulation by employees at commercial banks and brokers by providing, on a voluntary basis, documents and records requested by the SFO.

“The Bank is committed to publishing materials relating to the SFO’s investigations into benchmark manipulation when it is appropriate to do so.

“Until the SFO’s prosecutorial activity relating to Libor and other benchmarks is concluded, the Bank is not in a position to publish these materials.”

Last week this newspaper reported that Sir Paul Tucker, a former deputy governor of the Bank, apparently attended a meeting with representatives of the British Bankers’ Association in 2005 at which participants were told that Libor was being set too high, enabling the submitting banks to make profits. Sir Paul did not return a request for a comment last week.

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