July 9th, 2012
06:39 PM GMT
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London (CNN) – When the Deputy Governor of Bank of England, Paul Tucker, said in parliament Monday that the Bank (pictured above) has "no manual for Libor" I immediately thought its days are numbered.

Tucker was asked by a number of parliamentarians when the Bank did not know that private banks were manipulating what rate they were able to borrow money from each other from 2005-2008. Tucker made it clear the rate is set between banks and overseen by the British Banker's Association, not regulators.

Tucker said regulators want banks to announce interest rates based on actual transactions, not the rates 'offered' to each other (offered is the 'o' in Libor).

Then Tucker admitted, when the BoE pumped unprecedented amounts of money into the banks, in April of 2008, those involved would "not have dreamt" of using Libor as the base rate, if anyone involved knew Libor was a "cesspit."

Tucker says he did not know of the "cesspit" until a few weeks ago.  He is another of  the top bankers in London saying he did not know.

I am not questioning his honesty. In fact, he gave very direct answers to very direct questions.

The big questions were: Did politicians put pressure on the Bank of England to put pressure on Barclays to manipulate the quoted interest rate in Libor? No. Did Tucker tell Barclays it was best to lower its rates so the markets don't think Barclays was having troubled funding itself in the height of the economic crisis? No.

Bottom line: The government did not know. The Bank of England did not know. Former Barclays CEO Bob Diamond did not know. That is what parliamentarians are being told.

Now, on Tuesday the Chairman of Barclays, Marcus Agius, will give testimony. Lets see if he knew.

Someone had to know.

It is clear that part of the UK's attempt at cleaning up the banks will mean that one of the old fashioned self-regulated systems, like Libor, will go. It has to.

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