New investigation shows
The Bank of England might have been involved in Libor rigging, a new investigation has shown.
The 2008 recording shows that that the central bank put pressure on commercial banks to axe their libor rates during the financial crisis.
In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor submitter Peter Johnson, to lower his Libor rates.
He tells him: “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.”
Johnson objects, saying that this would mean breaking the rules for setting Libor, which required him to put in rates based only on the cost of borrowing cash.
Johnson says: “So I’ll push them below a realistic level of where I think I can get money?”
His boss Dearlove replies: “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.”