Diamond’s evidence ‘highly selective’

The Treasury Select Committee said Mr Diamond’s evidence on the Libor fixing scandal had fallen well short of the standards expected by Parliament.

The MPs yesterday published the initial findings of a probe into the circumstances surrounding the fixing of the Libor rate, which sets inter-bank lending prices, an offence for which Barclays was fined almost £60m in June.

In the report, the Bank of England was cleared by MPs of directing Barclays to artificially lower the Libor rate, as MPs found the bank was already doing so and it “did not need a nod, a wink or any signal from the Bank of England to lower artificially their Libor submissions”.

But both the Bank of England and the Financial Services Authority (FSA) were criticised for failing to spot the manipulation of the Libor rate.

And the MPs found that “it is high unlikely Barclays was the only bank attempting this”.

Publishing the preliminary findings report, committee chairman Andrew Tyrie said: “The Committee has called for action in a number of areas, including: higher fines for firms that fail to cooperate with regulators, the need to examine gaps in the criminal law, and a much stronger governance framework at the Bank of England.

“The sustained rigging of a crucial benchmark rate has done great damage to the UK’s reputation. Public trust in banks is at an all time low. Urgent improvements, both to the way banks are run and the way they are regulated, is needed if public and market confidence is to be restored.

“The manipulation was spotted neither by the FSA nor the Bank of England at the time. That doesn’t look good.

“Select committees are entitled to expect candour and frankness from witnesses before them.”