Hosie writes to Darling for LIBOR answers


SNP Treasury Spokesperson Stewart Hosie MP has written to the former Labour Chancellor Alistair Darling looking for clarity over the exchanges that took place between Whitehall officials, the Bank of England and former Barclays CEO John Varley about LIBOR rates at the height of the rate-fixing scandal.

An internal filenote released by Barclays Chief Executive Bob Diamond refers to a telephone call on October 28th, 2008 between Barclays and the Deputy Governor of the Bank of England Paul Tucker which discussed LIBOR rates. The note implied Whitehall sources may have put pressure on Barclays, via Mr Tucker, to artificially lower lending rates. According to the note,  Paul Tucker “stated the levels of calls he was receiving from Whitehall were senior.”

Under questioning from Mr Hosie at the Treasury Select Committee hearing Mr Diamond confirmed he had asked Barclays CEO John Varley to arrange communication with Whitehall officials or Ministers following the call from Mr Tucker. Mr Diamond said at the hearing further information could be provided from Barclays to Mr Hosie on the subsequent communications that took place.

Mr Hosie has now written to the former Labour Chancellor for clarification of his knowledge and role in these exchanges, and for answers to more general questions about what former Labour Ministers knew, and when.

Mr Hosie said:

“The full extent and the consequences of the LIBOR rate rigging scandal are yet to emerge, but it’s clear that the former Chancellor Alistair Darling is amongst those with questions to answer over what they knew about LIBOR manipulation, and when.

“Unanswered questions for Mr Darling include the names of the “senior” Whitehall sources discussing this matter with the Bank of England in October 2008, and who took the subsequent call from Barclays? As Chancellor at the time, was Mr Darling aware of what was going on under his watch, or was he asleep at the wheel?

“The extent of Labour’s mishandling of the economy during the financial crisis continues to emerge. Even Ed Milliband has admitted they didn’t get the regulation of banking right. The LIBOR revelations follow comments from the Bank of England governor and Hector Sants of the FSA over Labour’s failure to act on economic warnings quickly enough, causing a recession and costing thousands of jobs.

 “The LIBOR rate fixing potentially has serious implications for the costs of mortgages, loans and for lending to businesses at a time of financial crisis. I look forward to answers from Mr Darling to help get to the bottom of what happened and build a better banking system for the future.”