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STORIES:
Bank
of England Official May Be Implicated in Scandal - (www.cnbc.com) Britain's growing interest rate-fixing scandal
could claim yet another high-level victim: Paul Tucker, the man tipped to
eventually become the next head of the Bank of England. Barclays, the bank at the center of the
scandal, claims that Tucker, currently the central bank's deputy governor,
basically condoned Barclay's attempts to manipulate the widely followed Libor
interbank rate during the 2008 financial crisis. (Click
here for an explanation of Libor.) Barclays agreed on Monday to pay
$450 million to settle allegations it reported artificially low lending rates
in an effort to influence the Libor and bolster the bank's bottom line.
Diamond Quits as Pressure Mounts on Barclays Over Libor - (www.bloomberg.com) Robert
Diamond, the architect of Barclays Plc (BARC)’s investment
banking expansion, resigned as chief executive officer,
succumbing to political pressure to go after the bank admitted to rigging
global interest rates. Diamond, 60, will leave
immediately, the London-based bank said in a statement today, a day before he
faces questions by British lawmakers. Chief Operating Officer Jerry Del Missier
also stepped down, while Marcus Agius, who said yesterday he planned to resign,
will become full-time chairman and lead the search for a new CEO. Barclays was
hit by a record 290 million-pound ($455 million) fine last week for rigging the
benchmark for more than $360 trillion of securities. Diamond had yesterday
defied pressure to quit, pledging to implement the findings of a review into
how the bank sets the London interbank offered rate. U.K.
regulators are weighing whether to start criminal probe into Libor-fixing.
Sour Global Economy Drains Confidence From Deal Makers - (www.nytimes.com) Despite a flurry of
last-minute deals, the market for mergers and acquisitions and initial public offerings
stayed in the doldrums for the first half of the year, as the European fiscal
crisis and a bumpy economy sapped corporate confidence. Only the announcement
of a few transactions on Friday, notably Anheuser-Busch InBev’s $20.1 billion takeover of Grupo
Modelo, prevented the second quarter and first half of the year from looking
even worse. Including that acquisition, the dollar volume of deals fell 21.9
percent from the first half of 2011, to $1.1 trillion, according to data from Thomson Reuters. The number of announced
deals slipped 17 percent, to 17,826.
Barclays
CEO May Reveal 'Embarrassing' Details
- (www.cnbc.com) According to two people close
to Mr. Diamond, the Barclays chief executive is furious that he and the bank
have been blamed for “lowballing” the rates at which Barclays said it could
borrow from rivals at the height of the financial crisis in 2007 and 2008.
Bankers insist the authorities knew these rates were inaccurate but did not
object at the time because of fears it could further destabilize already
panicked markets. “[Regulators] knew perfectly well those rates were not the
ones where banks were prepared to lend to each other,” said one senior banker
at another institution. “They had all the evidence.” The settlement documents
themselves allude to prior dealings with regulators over the issue. These
include a conversation with the Financial Services Authority about “the extent
that the Libors have been understated” and an October 2008 exchange, since
revealed to have been between Mr. Diamond and Paul Tucker, deputy governor of
the Bank of England, in which Mr. Tucker asked Mr. Diamond why Barclays’ Libor
submissions were higher than those of other banks.
In
Stunning Letter, Barclays Nukes The Bank Of England For Being Behind The
Interest Rate Manipulation Scandal - (www.businessinsider.com) This morning, British investment bank Barclays announced that its CEO Bob Diamond would immediately resign
in the wake of a massive fine over manipulating interest rates a few years ago.
Specifically, Barclays has been accused of submitting false numbers about how
much it was borrowing money at, skewing LIBOR (which is an index measuring the
rate at which banks borrow money at). Diamond will be at a government hearing
tomorrow, and in preparation for that, Barclays has submitted a stunning letter
to the government, basically accusing the Bank of England of being the real
conspirator behind the interest rate manipulation scheme.
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