Bank of England deputy governor Paul Tucker fights Libor accusations - liveJosephine Moulds, guardian.co.ukGuardian
6.15pm: Tyrie's sounding like a headmaster again.
This doesn't look good Mr Tucker.
6.10pm: Former fellow monetary policy committee member David Blanchflower, for one, is clearly not impressed with Tucker. He tweets:
Was Tucker's job to sort this out and he knew about it in 2007 and did nothing and didn't even vote to cut rates until oct 2008.
6.08pm: Sky's Ed Conway notes that Tucker's found his catchphrase...
Bob Diamond's catchphrase last week: "I love Barclays". Paul Tucker's catchphrase today: "This market was dysfunctional"
Ed Conway (@EdConwaySky) July 9, 2012
6.04pm: Tucker says he can remember turning to the BBA and asking them to address claims of low-balling of Libor - but didn't read it as cheating. Again, he insists:
I understood this as .. this market isn't working. Banks have concerns about where they are putting their Libor submissions. Nobody presented this as dishonest.
It's not getting any more convincing the more times he says it.
6.00pm: MP now pointing out that Tucker was at a meeting that discussed the low-balling of Libor in 2007. Here are the minutes of that meeting. It rather goes against his assertion that he was not aware of low-balling of Libor. Tucker says:
I heard this as ... they don't know what each other are doing. They were relying on bilateral private transactions. I didn't read this as cheating.
MP says this was clearly low-balling. Tucker says:
It may well be with hindsight. It is not how we understood it at the time.
5.55pm: Tyrie's telling Tucker off for not taking notes. "It sounds like a bit of a mess," he says. Tucker agrees:
It was a mess. The world financial system fell apart. We had experienced nothing like it.
5.49pm: Labour MP Chris Leslie has put out his response to Tucker's evidence, calling for an apology from Chancellor George Osborne.
Osborne said last week that "people around Gordon Brown" were "clearly involved [in the scandal around the manipulation of Libor] That's Ed Balls, by the way". Leslie says:
The game is up for George Osborne. It is now crystal clear that the allegations he threw around were completely wrong and without foundation.
The deputy governor of the Bank of England has made it 100% clear that neither Ministers nor officials leaned on the Bank of England to ask Barclays to fix Libor rates. In addition Bob Diamond has also said that he did not believe he was being asked by Ministers or officials to fiddle Libor rates.
The last Labour government was rightly concerned with legitimate policy changes to reduce inter-bank lending costs during the global financial crisis. The Conservatives at the time even said they did not go far enough to reduce Libor. But that is completely different from the deliberate fixing of the Libor rate, which Barclays traders were involved in over several years.
5.41pm: He says he was not personally involved in discussions with Barclays before Diamond's resignation. Asked whether Diamond made the right decision in quitting, he says:
The events of the past two weeks show that absolutely decisive action was needed.
5.33pm: Tucker says he has no recollection of the government telling banks to pass on rate cuts. Slightly different from his flat denials.
5.30pm: Tucker says he is not aware of Libor being manipulated since 2008. Says he now realises the Libor market was a "cesspit".
He says the government should look at every single index that is not based on actual transactions and is calling for Martin Wheatley's review into Libor to go into all unregulated markets.
He's also blaming the British Bankers' Association for not being on top of Libor.
5.26pm: Tucker has certainly not convinced everybody. Guardian deputy editor Ian Katz (@iankatz1000) writes:
Hving listened to Tucker explain why he wsn't urging Barclays to reduce Libor numbers 3 times, still snds to me like that's what he ws doing
5.20pm: Tucker says the Bank of England didn't take any responsibility for Libor, he says "we were not a regulatory body".
5.16pm: Tyrie is asking the same question. Tucker says:
Because markets had dried up.
He's reiterating the point that he was worried that banks were not borrowing and made the wrong estimates, not that they were being dishonest.
Asked whether Diamond was whistleblowing on bad Libor submissions, he says:
I did not understand this conversation in any way as Mr Diamond telling me in any way about dishonesty or cheating.
5.13pm: That does raise some questions about Tucker's judgement. Why didn't the alarm bells go off when Diamond said other banks could be low-balling Libor?
5.08pm: Tucker's starting to look a bit ruffled.
One of the MPs points out that in Diamond's note he told Tucker that not all banks were providing quotes at the levels that represented real transactions. To which Tucker is reported to have said, "Oh, that would be worse."
Tucker says he believed Diamond meant those banks just didn't have to borrow and that when they came to borrow they would have to pay a higher rate.
5.07pm: Tucker says he was not aware of allegations of dishonesty in Libor.
5.04pm: Tucker makes rather plaintive statement.
We wouldn't suggest anybody did anything wrong.
He says it was not remotely in his mind that he could be misinterpreted.
5.00pm: The Sun's business editor says Tucker clearly fed up with Barclays' attempt to deflection attention form itself.
Did Barclays dump on the BoE last week, asks Tyrie? It's pretty clear Paul Tucker thinks they jolly well may have
steve hawkes (@steve_hawkes) July 9, 2012
4.58pm: Tucker says that Barclays was next in line for state aid at the height of the financial crisis.
4.55pm: My colleague Jill Treanor notes:
That "absolutely not" when Tucker was asked repeatedly on intervention by government ministers and officials about urging banks to cut Libor might not sit very well with George Osborne's assertion that Labour were involved... Still early days for this session, obviously, but he seemed pretty adamant.
4.52pm: Tucker says these senior Whitehall figures were asking, should we be worried about Barclays, and is government policy working not pushing him to lean on Barclays over its Libor rates.
He categorically refutes suggestion that Shriti Vadera, Jeremy Hewood, or any government minister leaned on him to encourage Barclays to lower its Libor submissions.
He adds that he doesn't think he spoke to Vadera throughout the process.
4.47pm: Tucker seems pretty angry at the idea that he was suggesting Barclays should cut its Libor submissions. It's worth pointing out he hasn't named any politicians as the mysterious senior Whitehall figures, all the names he mentions are civil servants.
It's a bit of a change of style from Bob Diamond as well. Tucker's gone for calling MPs as Mr Tyrie, and so on, avoiding the intimacy of Diamond's first name terms.
4.44pm: Tyrie asks Does Diamond's note accurately portray the conversation you had. Tucker says the last sentence gives the wrong impression. He syas it should have said, are you following your operations closely.
He also names the senior officials in Whitehall who he talked to about Libor as John Cunliffe in Cabinet Office, Nick MacPherson of the Treasury, and Tom Scholar.
4.42pm: Tyrie asks, has there been any work done to examine the performance of the bank during the Libor crisis. Tucker says no.
4.40pm: And they're off. Tyrie has asked why the Bank of England does not have records of phone conversations with Bob Diamond.
Tucker says they do, but the conversation with Bob Diamond was not something he made a note of although he greatly wishes there were. He says:
These were extraordinary times, many of us were rushing from meeting to meeting. The routine system of recording things was creaking.
4.37pm: The MPs are seated, journalists are filing in, but still no sign of Tucker. You can watch a live stream of the hearing on Parliament TV.
4.18pm: Andrew Tyrie, Conservative MP for Chichester, is chairman of the Treasury select committee, and will be leading the questions today. And we'll have the same line-up of MPs on the committee as at Diamond's hearing last week.
Labour's John Mann was the star of that show and has already made the headlines today by releasing the Bank of England emails he requested with a freedom of information request. (see 3.55pm)
4.01pm: My colleague Jill Treanor has a few questions she would like the MPs to put to Tucker.
Paul Tucker asked to appear before the committee - a pretty unusual request - when there were suspicions that Bob Diamond's appearance before MPs would make it appear that the deputy governor of the Bank of England had in some way given Barclays a "nod and wink" to reduce its submissions to the Libor panel. In the event, Diamond made clear that he did not think this was the case despite his record of the conversation on October 29 2008 which was published last week.
This record - sent in an email to the then Barclays chief executive John Varley and copied to the co-head of the investment bank Jerry del Missier - describes how Tucker had received calls from "a number of senior figures within Whitehall" to question why Barclays' submissions were higher than rivals.
The series of email exchanges released ahead of Tucker's appearance this morning show that he was in correspondence with Sir Jeremy Heywood, then a senior official in Gordon Brown's number 10 and also with Diamond and others at Barclays about Libor. Yet none of the emails released so far appear to indicate that Tucker or Heywood were ordering Barclays to reduce its Libor submissions.
So, if Tucker's appearance for the committee is intended to clear up who the senior Whitehall figures were and what exactly he and Diamond discussed on October 29, there is certainly more work to be done by the MPs.
The latest emails show Diamond and Tucker arranging to talk on October 27. Did they talk that day or leave it until two days later - the day that Diamond sent the internal email that has sparked Tucker's appearance? Perhaps more crucially, Tucker needs to come clean about when he knew or suspected that Libor was not all it was supposed to be.
If nothing else, the Tucker emails released today show the extraordinary state of the banking industry in October 2008. Just after 8pm on the evening of October 13 when the industry bail out had just been announced, Tucker wrote to Heywood: "Let's hope it works".
3.57pm: But Tucker is no longer the bookies' favourite to take over as governor of the Bank of England when Mervyn King steps down in July next year.
Paddy Power is now offering odds of 9-4 that Tucker will get the job, from 6-4 on Friday and 4-5 before the Libor scandal broke.
3.56pm: As a Breakingviews columnist notes, they don't provide any clear evidence against Tucker.
First read of Paul Tucker emails: no smoking gun wrt rate-rigging. Jeremy Heywood revealed as Whitehall worrier about Barclays LIBOR rates.
Peter Thal Larsen (@peter_tl) July 9, 2012
3.55pm: So far today, the Bank of England has released a series of emails between Tucker and the cabinet secretary Sir Jeremy Heywood, and Diamond. These show that Heywood privately raised questions about the way Libor was being set during the 2008 banking crisis.
Labour MP John Mann obtained the emails through a freedom of information request and is furious that the Bank of England did not produce them before Diamond's select committee hearing last week. He said:
The information released today would have been critical for the Diamond meeting last week. They would have understood the urgency of the request and this clearly displays their contempt of the Parliamentary process.
3.54pm: Good afternoon and welcome to our live coverage of today's Treasury select committee, where Bank of England deputy governor Paul Tucker will be fighting any suggestion that he encouraged Barclays to keep its Libor submissions low.
Just to recap, Libor submissions are supposed to represent the interest rate at which banks are willing to lend to one another. Barclays has been fined a record 290m by regulators in Britain and the US for attempting to manipulate the price of Libor by making false submissions. That led to the resignation of its chief executive Bob Diamond last week.
Tucker requested today's hearing after Barclays issued a memo in which Diamond made a record of a conversation he had with Tucker during the banking crisis. Although Diamond has since said he didn't think Tucker was encouraging Barclays to lower its Libor submissions, the memo led to some confusion about whether the central bank was encouraging Barclays to do just that.