10 July 2012

Dead Chameleon

Glen Newey · Libor

In his Treasury Select Committee evidence yesterday, Paul Tucker, deputy governor of the Bank of England, denied nudging or winking to Barclays over the Libor rate. Whatever the semiotics, warning signs over Libor were already plain long before Tucker’s supposed nictation in October 2008. Minutes from November 2007 of the Bank’s money markets liaison committee meeting show its members were already exercised, eleven months before the exchanges between Tucker and Bob Diamond at Barclays, over lowballing Libor prices: several expressed concern that ‘Libor fixings had been lower than actual traded interbank rates’. The oversight regime resembles a dead chameleon, stuck on orange, while the system goes critical.