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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soundoff (6 Responses)
  1. Mandijerri

    To be fair, I can't believe in the 21st Century that we still have things like Libor around. I mean, this is the digital age, isn't it? At the end of the day, more than Libor will have to go. The banks tried self-regulation, clearly that means self-interest in banker speak. In the new era of nationalism and regulation that they have forced on us and themselves, I can see Commercial banking changing as well. Already there are serious calls for the separation of retail and commercial banking. This will happen. Retail banks will become stronger as a result and Commercial banks? Self interest can only be your master for so long. Being international means you are above such things as borders, but when no-one wants their banking system besmirched by 'dirty' banking, where do you stand? Commercial banks cannot survive without nations, unfortunately for them, nations have and will survive without them.

    July 9, 2012 at 7:47 pm |
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    Fun to learn English for free

    July 12, 2012 at 8:56 pm |
  3. Joyce

    how do you get everyone to look so hot togehter? your images are always sultry and stunning!the last one should be blown big and put somewhere like times square.

    July 27, 2012 at 11:10 pm |
  4. Jonathan

    I sincerely believe that these dodgy Banker scandals are set to continue, since, a couple of years back, Directors of a business that about fifty people worked for (myself included), exploited their workers, by using holes in Employment law to withhold staff wages and ultimately cheat employees out of the money that they had worked hard to earn ( http://bobblackmanmp.info/ ).

    Despite Employment Tribunals agreeing that staff were treated badly, the High Court said that they are powerless to help because their is noting stopping this in law, whilst the local MP wasn't interested in helping.

    But, now, to rub salt in the wound, the local MP, and even Government officials simply try to kick the issue into the long grass, by claiming that it's not in the public interest to do anything about this matter, whilst refusing to have the Directors struck off, failing to introduce new laws to outlaw these kinds of sharp practices, and not even bothering to call for an inquiry into this scandal.

    July 31, 2012 at 7:04 pm |
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