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By Martin Kelly
 
Labour MP Alistair Darling, who was Chancellor of the Exchequer at the time the LIBOR rate rigging scandal was taking place, has denied any knowledge of wrongdoing.
 
Interviewed on Channel 4 News, the former Treasury head said he had no knowledge of phone calls between the Bank of England and Barclays and denied having instructed anyone to suggest that Barclays LIBOR rates were too high.

However in a startling admission, the former Chancellor admitted that the last Labour Government had sought to lower the rates through what he described as changes in policy.

Mr Darling’s appearance was the first since the scandal came to light and followed repeated calls for Labour Ministers to explain what they knew about the scandal.

Asked about the internal memo released yesterday by Barclays, that referred to calls implying senior Whitehall officials were keen to see Barclays lower their rate, and whether he had instigated the process, Mr Darling said: “No, certainly not”.

The former Chancellor said there was no evidence that other Ministers or junior Ministers had urged the Bank of England Deputy Paul Tucker to make the calls.

Mr Darling said he wanted Mr Tucker, who made the calls to Barclays former head Bob Diamond who is scheduled to appear before MPs tmorrow, to appear before the same Committee of MPs as soon as possible.

“What Bob Diamond, or Barclays, appear to be saying is that the bank told them to do this.” said the Labour MP, who added:

“I would find it absolutely astonishing that the bank would ever make such a suggestion, and equally I can think of no circumstances that anyone, certainly in a department which I was responsible for - the Treasury – would ever suggest wrongdoing like this.”

Challenged that when Chancellor, Mr Darling knew that LIBOR was a fudge and unreliable, the Labour MP conceded there had been “concern in just about every part of the world” about the way the rate was set.

The former Chancellor’s acknowledgment that there were concerns raised about LIBOR is almost certainly a reference to revelations this week that the UK regulatory bodies were warned five times, starting in 2007, that there were problems the way the rate was set.

Mr Darling also admitted that the Labour Government were interested in the rate in 2008 and indeed had sought to bring the rate down.  However he insisted that the method used had been appropriate and acceptable.

“The way to get it down though was the way we did get it down, which was the Credit Guarantee Scheme, the Special Liquidity Scheme – in other words policy was changed in order to get that rate down.”

Mr Darling said he accepted responsibility for his time as Chancellor, but refused to issue an apology for the banking chaos that has ensued.

Pressure has been building on the former Chancellor to respond to the growing scandal and there have been calls for former Labour Ministers to appear before a full public inquiry.

Responding to the new claims that “senior” Whitehall sources put pressure on Barclays to artificially lower lending rates via the Bank of England,  the SNP’s Treasury Spokesperson Stewart Hosie MP said all Labour Ministers in office at the time must provide details of exactly what they knew and when, about LIBOR interest rate fixing.

The email claims Deputy Governor of the Bank of England, Paul Tucker “stated the levels of calls he was receiving from Whitehall were senior.”

Mr Hosie, a member of the Treasury Select Committee said the email raised yet more questions about the role of senior figures in the former Labour Government.

Mr Hosie said:

“Questions will rightly be put to the former Barclays Chairman Bob Diamond during the Treasury Select Committee evidence session to get further information on who was involved in these calls – but it’s crucial that Labour Ministers in office at the time must also answer for their actions. 

“The interest rate fixing scandal has further undermined public trust in the banking sector.  For too long Labour has been trying to pretend that the economic crisis had nothing to do with them – but now we know that Mr Brown, Mr Balls and Mr Darling were in charge during the worst period of regulation in the history of the UK financial system.

“The buck stops with Ministers and they must account for their actions in public.

“This demonstrates the need for a full and transparent investigation leaving no stone unturned. The SNP’s preference is for a judge-led inquiry which would ensure all the right questions were asked of the banks, the regulators and the Ministers to whom they reported.”


The SNP has published a list of ten questions they say former labour Ministers need to answer:

1. During the former Chancellor's discussions with various banks including Barclays and RBS, did the subject of funding rates for RBS arise and did Mr Darling receive a briefing on this subject from officials?

2. Did the former Prime Minister or Chancellor ask whether there was oversight of the arrangements around LIBOR given the increasing relevance of liquidity and the obvious self-interest of banks during the financial crisis?

3. When was the former Chancellor first informed of the LIBOR fixing allegations and by whom? What was his immediate response?

4. Do the former Prime Minister, Chancellor and UK Economic Secretary consider the fixing of LIBOR to have potentially impacted the ability of UK banks to remain solvent during the financial crisis? If so, was this a consideration in their silence on the matter?

5. Did they receive official advice on the relevance of transparency around such a serious investigation in the context of wider allegations of malpractice and mismanagement in UK banking?

6. Why did the former Chancellor not make a statement to Parliament on these serious allegations as soon as they became known or at least at some point during his tenure in office?

7. Does the former Chancellor believe it would have been appropriate in the context of substantial malpractice in the banking sector to at least make Parliament aware of the LIBOR fixing investigation?

8. Do the former Prime Minister, Chancellor and Economic Secretary believe it was appropriate for such an important financial rate to be set by the banks without proper supervision particularly in the context of a banking crisis?

9. The Economic Secretary is responsible within HMT for banking, finance and financial regulation. Did the former Economic Secretary attend any discussions or briefings with regulators, officials or banking representatives which covered the subject of LIBOR?

10. Will Ed Miliband compel the former Labour ministers to give come clean on what they knew and when?

Comments  

 
# Hirta 2012-07-03 22:34
Just made his NO campaign all the more difficult, and added a good few more YES's!
 
 
# call me dave 2012-07-03 22:38
Well AD will be a busy boy for a while it seems. Who will take over the "ssh! Dont say no - vote no" campaign.
Maybe GB can . . Oh wait!

Surely the Scottish people will get the message now?


Events dear boy _ _events! They were right.
 
 
# rgweir 2012-07-03 22:47
Going by the way Darling was responding to John Snow his speach and manner was that of a worried man.
 
 
# J Wil 2012-07-03 22:58
It sounds as though he is edging towards a full but grudging confession.

In preparation, perhaps, for the mud slinging we are about to hear tomorrow at the Treasury Select Committee.

I wonder how the Scottish media will ameliorate it?
 
 
# rhymer 2012-07-04 18:38
[quote name="J Wil" I wonder how the Scottish media will ameliorate it?
Same as usual

A/. Totally ignore it, or

B/ False headline..... "A. Darling accuses SNP
of making accusations"
 
 
# proudscot 2012-07-03 23:40
What a pity there is no FMQ session this week in our parliament. I would have liked to see Lamont squirm under the lash of the First Minister's tongue. Another fine mess, presided over by London Labour's equivalent of Laurel and Hardy - ~Abominable No-Man Darling and North British Broon.
 
 
# Roll_On_2011 2012-07-04 00:03
With regards to ‘Bitter Together’ and AD’s dilemma:

But, Mousie, thou art no thy lane
In proving foresight may be vain:
The best laid schemes o' mice an' men
Gang aft a-gley,
An' lea'e us nought but grief an' pain,
For promised joy.

Rather apt under the current circumstances.
 
 
# wee folding bike 2012-07-04 04:13
Happy Separation Day to all our US readers.
 
 
# Barbazenzero 2012-07-04 05:55
Seconded.

Would make a great question for today's PMQs: Has the PM congratulated Pres. Obama on the USA's separation day?
 
 
# cardrossian 2012-07-04 06:06
Would you but a second hand car from this man? Then why give anything he says credence?
 
 
# Mac 2012-07-04 06:38
Alistair Darling admits that the previous Labour government knew about concerns over LIBOR being fixed artificially.

Alistair Darling admits that the previous Labour government wanted lower LIBOR rates.

However, Alistair Darling is claiming that the two are unconnected even though it is known that the BoE and Whitehall were putting pressure on banks to lower LIBOR.

Everyone from bankers, regulators and politicians wanted lower LIBOR rates, even if that meant the rates being artificially fixed. Everyone from bankers, regulators and politicians knew what the other were doing in trying to fix LIBOR rates. That means all are guilty.
 
 
# Ready to Start 2012-07-04 06:54
Are those black eyebrows Teflon as Darling is given an easy ride by a supine media?

When you consider the personal abuse and bile poured on Alex Salmond in newspaper letter pages and unionist columnsists, including two prominent Celtic supporters, it seems editors are reluctant to publish similiar letters attacking the NO Scotland campaigners or are the YES supporters above such tactics?
 
 
# taimoshan 2012-07-04 09:40
Ready to Start - don't start that divisive stuff pleasel. I know plenty of Celtic supporters who support AS, SNP and Independence and plenty of supporters of my own club Dunfermlinedo so too! Don't do the unionists work for them!
 
 
# Dundonian West 2012-07-04 11:13
Yes taimoshan.Celtic supporters have a Facebook page:---

'Celtic Fans for SNP and/or Scottish Independence'
facebook.com/.../...

Most independence movements worldwide, have included all sections of society----and so it must be in Scotland.
 
 
# ituna semea 2012-07-04 07:07
Is keeping interest rates low a crime?
 
 
# doctor_zaius 2012-07-04 07:28
To use an analogy: Is carrying a large sack with the word 'SWAG' on it and wearing a stripey jumper/mask a crime? Not as such, but it DOES make you look like a burglar. If you were off to a fancy dress party it'd be ok. Otherwise...

It is not so much 'keeping interest rates low' as 'keeping interest rates artificially high sometimes to make more profit and then keeping them artificially low to disguise a crisis'. If it was such a benign act, would so many people have been sacked/have resigned?

The question is rather more like: Was the treasury aware of (or indeed complicit in) the rate fixing with a view to pretending the crisis was of a lesser magnitude and to allow the deceit of the general public?

However, I am sure you were already aware of all this and are just causing mischief. Darling (and Brown) must go through a due process, given how spectacularly they took their eye off the ball (or, worse, encouraged this to happen).
 
 
# tartanfever 2012-07-04 07:35
If doing so artificially and by manipulation then most certainly it's a crime.
 
 
# Fungus 2012-07-04 07:38
When you do it fraudulently it is ituna
 
 
# scottish_skier 2012-07-04 08:04
No, but fraud is, e.g. falsifying libor rates for profit.

Likewise aiding and abetting such activity is also a criminal offense.

It is going to be very interesting to see how deep this particular rabbit hole goes.
 
 
# brusque 2012-07-04 16:42
Quoting ituna semea:
Is keeping interest rates low a crime?



Why don't you read some of the volumes of information there is about this in the media.

Try the Scotsman, you can believe everything they say...............allegedly.

Why do you think people have resigned and/or gone to ground if it is all completely innocent?
 
 
# rhymer 2012-07-04 20:38
Quoting ituna semea:
Is keeping interest rates low a crime?

Well... I 'd give some of your pessimistic comments
a rather low interest rating
 
 
# UpSpake 2012-07-04 08:19
Put the incompetent on the stand !. So help him God !.
 
 
# nchanter 2012-07-04 09:07
AD started his career as a bagman -- still a bagman
 
 
# john__ 2012-07-04 09:17
I think that people here, including this article are getting confused. In particular I think that the line "However in a startling admission, the former Chancellor admitted that the last Labour Government had sought to lower the rates through what he described as changes in policy" is either a complete misunderstandin g of what was said, or a blatant attempt at black propaganda of the worst sort. Not what I would expect from these pages.

What AD said (and I paraphrase) was that they used one of the levers of the treasury (making money available) because they saw that the inter bank lending rate was so high that it was damaging lending by the banks. The effect (or one of them) of making money available is that the banks' own calculations on what the lending rate should be came out with a lower figure (as their potential losses would be effectively covered by an insurance policy).

I am no fan of AD, but this is exactly what governments are supposed to do. It is not only legitimate, but it is the actual purpose of government.

If however the other allegations are true (traders inflating the rate for profit and being ignored, or the BoE phoning barclays and asking them to ignore thier own assesments to lower the rate) then AD already has plenty to answer for. Please do not muddy the waters with false (or disingenuous) allegations.

John
 
 
# J Wil 2012-07-04 09:48
They showed a graph of the change in the LIBOR rate with time on TV this morning. Following the date of the communications between Barclays and the BoE (the email) the rate fell off a cliff, showing that something drastic had influenced it. It will be interesting to hear how this is explained away this afternoon at the select committee.
 
 
# Roll_On_2011 2012-07-04 10:33
Aye J Will

I presume this is it.

So did Tucker nudge Diamond?

LIBOR timeline Chart from Guido on twitter

twitpic.com/a3q2r9
 
 
# Legerwood 2012-07-04 13:07
I wonder if the changes in the rate correlates with the 'flipping' of houses by MPs. All those mortgages affected by LIBOR...
 
 
# Dundonian West 2012-07-04 10:42
OT.New BBC Director General.Comments allowed.
bbc.co.uk/.../...
A change in BBC Scotland news and comments policy would be good for starters!
 
 
# Rafiki 2012-07-04 10:46
Alistair Darling : Hear no evil, see no evil, speak no evil.

Now we know why he is the front man for the No Campaign.
 
 
# balgayboy 2012-07-04 10:51
Darling is a chancer, always has been along with his erstwhile friends Brown, Blair & Balls. The people of this country will never witness the truth from these people. This deception will go with them to their grave. The only way that the people of Scotland can move forward is to vote for Independence and have a real influence in the way their democratically independent government runs their economy without the super greedy rich bankers and their MSM cohorts.
 
 
# maen_tramgwydd 2012-07-04 11:22
Roll_On_2011

The Libor chart implies that the BoE 'leant' on other banks as well as Barclays. Who 'leant' on the BoE? Who were the incumbents of No 11 and No 10?
 
 
# Seagetagrip 2012-07-04 11:46
Thanks Dundonian West

Have posted two comments so far and YOU ONLY HAVE TO WAIT 10 MINUTES BETWEEN COMMENTS!
 
 
# Dundonian West 2012-07-04 12:07
"YOU ONLY HAVE TO WAIT 10 MINUTES BETWEEN COMMENTS!"
Blessed are the peacemakers!
Glad you went on to the link.
I'm thinking of using Nick Robinson's blog to comment on the non-comments----if you know what I mean!
 
 
# balgayboy 2012-07-04 11:55
BREAKING NEWS Nick Robinson Political editor I can reveal that the Prime Minister called the Labour leader Ed Miliband yesterday to discuss how to set up an inquiry into banking. Labour sources said that Ed Miliband told David Cameron that "if he wanted cross party consensus he was not going about it the right way" and asked him "to control those around you" who were talking about putting Ed Balls and other Labour figures in the dock. The Prime Minister's aides say that he was explaining how the government intended to allow the Commons to vote on Thursday when there will be two motions - one backed by Labour to set up a judicial inquiry and one proposed by the government to set up a parliamentary inquiry.

Yup, squirming and self preservation comes to mind! what does Johann Lamont think of this and how the Scottish People are 'Better together" with this despicable rabble. Get me away from this in 2014.
 
 
# Roll_On_2011 2012-07-04 12:11
OT - Piece of good news amongst all this doom & gloom

Hospital acquired infections at lowest rate since recording began

news.stv.tv/.../...
 
 
# Old Smokey 2012-07-04 13:12
Love how Ed Balls is distancing himself from the goings on of 2008, by stating he was Secretary of State for Children, Schools and Families at the time.
However Mrs Balls was Chief Secretary to the Treasury
Treasury members of the cabinet for the period 24 January 2008 – 3 October 2008
were :
Alistair Darling - Chancellor of the Exchequer
Geoff Hoon - Secretary to the Treasury
Yvette Cooper - Chief Secretary to the Treasury
and of course Gordon Brown
 
 
# J Wil 2012-07-04 18:11
I wonder if Ed doesn't do pillow talk?
 
 
# Frankly 2012-07-04 15:32
Oh What a Tangled Web (Part 1):

tinyurl.com/bvf99b8
 
 
# Louperdowg 2012-07-04 15:57
Tangled indeed.

I think that Mr Darling may be ensnared.

When do we get Part 2?
 
 
# macgilleleabhar 2012-07-04 16:45
Isn't Mr Darling as my late Skye mother would have said,
"One of those Lewis Wee Frees who believe that sex is alright on the Sabbath as long as you don't enjoy it and that the cockerel on the croft should be caged under a creel on the Sabbath lest the hens commit the sin of fornication" and thereby compelled to tell the truth under oath or risk his soul to an eternity and beyond of hellfire and damnation in Satan's darkest pits?
 
 
# Frankly 2012-07-04 16:59
Tomorrow, I hope.
 
 
# Frankly 2012-07-06 11:57
Oh What a Tangled Web (Part 2):

tinyurl.com/c7eprw9
 
 
# tilly 2012-07-04 16:20
J’accuse!

George Osborne accuses Labour aides, not Bank of England, for rate-rigging scandal.

tinyurl.com/8ygsf2o
 
 
# Leswil 2012-07-04 16:26
Accept limited liability, say sorry, and hope the rest goes away. This seems to the way that politicians are now dealing with things.
I do not think that this will though. I wait to see who in Whitehall was either in discussion with Barclays or directed the conversations. Then we will see where it goes, but I cannot see labour being in the clear, they were the government at the time, so the telephones between Darling, Brown and Balls, will be white hot.
 
 
# PrideoftheClyde 2012-07-04 17:06
Sorry to go off topic but did anyone see the absolutely shockingly biased report by Nicholas Whitchell about the Queen's visit to Glasgow?

He even ended by suggesting (with a quote-mined clip of the Queen at her Silver Jubille) that Her Majesty has taken a firm 'no' stance. He also put an obvious emphasis on the word 'United' in United Kingdom. Absolutely no reason to turn a Royal visit celebrating a Monarch's 60 years on the throne into a political football. But hey ho there we are Witchell managed to do it anyway.
 
 
# tarbat 2012-07-04 20:15
Quoting PrideoftheClyde :
Sorry to go off topic but did anyone see the absolutely shockingly biased report by Nicholas Whitchell about the Queen's visit to Glasgow?.


I saw this and was shocked. I guess the instruction from BBC bosses to not use terms like "break-up" when referring to independence was never going to last - all of one month!

Time for the SNP to make another complaint to the BBC Trust?
 
 
# schawaldowris 2012-07-04 17:16
Nicholas Witchell?
Is he not the BBC journalist that Prince Charles stated on camera:- "I just can't stand the man"
 
 
# Welsh Sion 2012-07-04 18:42
O/T But I thought this might prove useful to you who are supporting the lowering of the voting age to 16 with regard to the Independence Referendum:

bbc.co.uk/.../...

Don't forget that we have a Labour Government with no overall majority back home. However, it is *interesting* to note that Welsh Labour have a different take on this matter to Scottish Labour.
 
 
# brusque 2012-07-04 18:45
Prince Charles is not alone!

I'm sure her Maj would prefer that the UK stays U, but she has more than enough tact and diplomacy training not to allow her Jubilee Celebrations to be turned into a political debate - no matter how much the BBC's high heid yins want it.

For shame.

(I have to say it; Darling has the look of a man perched on a razor blade in the photo above.)
 
 
# raisethegame 2012-07-04 19:41
Re Nicholas Witchell: here's the piece:
Very political!
bbc.co.uk/.../...
 

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