LIBOR: the mega-scandal of all mega-scandals is upon usMadison Ruppert, Contributor For the uninitiated, as it were, the scandal centers on British financial institution Barclays, the former CEO of which testified yesterday before the British Parliament. Bob Diamonds testimony on July 4, 2012 was almost painful. Diamond fell back on the incredibly tired excuses used by the criminals in the financial sector which were accurately summed up as a long version of It was awful, but dont blame me. LIBOR is, to put it in a crudely simple fashion, is the fluctuating rate at which banks can borrow from each other. However, this isnt just a rate which affects UK banks. Indeed, the LIBOR is used as an indicator for many of the worlds various fluctuating rates spanning a wide range of so-called financial products. This is because the LIBOR is used as a rough indication of the level of confidence between one bank and another, with high rates indicating a low level of confidence and uncertain financial stability. The email allegedly details a conversation between Diamond and deputy governor of the Bank of England, Paul Tucker, held just earlier that day in which Tucker actually encouraged Diamond to artificially lower LIBOR rates. A Barclays memo to the Treasury Select Committee released by the Telegraph on July 3 also reveals, Subsequent to the call, Bob Diamond relayed the contents of the conversation to Jerry del Missier [then head of markets at BarCap]. However, the memo also claims: Bob Diamond did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier. However, Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect to the submitters. This is just the beginning. As Matt Taibbi (watch the below video for more great comments from Taibbi on this scandal) correctly points out in his blog for Rolling Stone: Whats even worse is that Diamonds email suggests that Tucker was only following orders, i.e. that Tucker had received phone calls from a number of senior figures within Whitehall that is, the British government expressing concern about Barclays high Libor rates. If true, this would mean that Tucker was essentially playing the messenger for the British government in instructing Diamond to create a false sense of financial stability by the manipulation of borrowing rates. In the email, Diamond actually says that the problem with Barclays was that they were actually reporting the real lending numbers, not ones artificially deflated before release. I asked [Tucker] if he could relay the reality, that not all banks were providing quotes at the levels that represented real transaction, wrote Diamond in the email. Tucker then slyly instructed Diamond to fudge the numbers in what Taibbi characterizes as the painfully oblique manner of an English gentleman trying to engage a prostitute without using any dirty words. Tucker first said to Diamond that while he was certain [Barclays] did not need advice, Barclays need not report the high (read: true) rates that they had been reporting. Diamond then relates that Tucker said, It did not always need to be the case that [Barclays] appeared as high as [it has] recently. The attempts by Barclays to downplay the email and push blame away from Diamond and del Messier in the passage of the memo quoted above are just plain laughable. Barlcays admits, Certain traders sought to manipulate Barclays Libor submissions by sending requests to submitters, and that, The majority of these were sent during 2005 to Sept 2007 and sporadically in 2008/2009. There were no further requests to submitters after May 2009. However, they claim, There was no knowledge by anyone in the bank above desk supervisor level of this conduct at the time. Senior management were not aware. This, I believe, is a laughable assertion when one actually looks at the facts. One would have to play quite fast and loose with the interpreting the quite clear wordage of the Diamond email in order to support such a position. Taibbi, for one, suspects that the Diamond emails mention of figures from Whitehall could be, if nothing else, an awesome piece of political jungle defense by Diamond, tossing a hand-grenade into the seat of Her Majestys government minutes before hes supposed to be grilled by parliament. Taibbi notes that unfortunately (at least for now) the only evidence we have regarding the mention of Whitehall is Diamond, and under normal circumstances his word should mean less than nothing. This is especially true coming from a man who actually claimed in 2011 that it was time for banks to stop apologizing for what they had done. Yet, we do, in fact, know that the conversation between Diamond in Tucker did occur and we know that they did discuss LIBOR. The only problem is that we dont know how far this chain of damnation really goes. Did I forget anything or miss any errors? Would you like to make me aware of a story or subject to cover? Or perhaps you want to bring your writing to a wider audience? Feel free to contact me at admin@EndtheLie.com with your concerns, tips, questions, original writings, insults or just about anything that may strike your fancy. This article first appeared at End the Lie. linkwithin_text=Related Articles: 