News Update


MP requests for a Parliamentary investigation into evidence of rate rigging.

Parliament has been urged to look into “damning evidence” that the Bank of England misled it about interest rate fixing.

David Davis, a senior Conservative backbencher, said new information called the former deputy governor’s answers to Parliament into question.

He asked for a new parliamentary inquiry into the affair during a House of Commons discussion.

Former Labour shadow chancellor John McDonnell backed him.

Mr Davis noted information provided by former Bank of England deputy governor Paul Tucker, who told the Treasury in July 2012 that he had only recently learned of interest rate manipulation.

“Yet there appears to be damning evidence that this was untrue, including meetings, phone calls, and sworn testimony to US authorities,” Mr Davis said.

“It was also claimed that there were no instructions from the Bank of England to change Libor submissions,” he continued. “However, evidence uncovered by Mr Verity suggests that this is also false.”

Mr Davis’ testimony implies that Mr Tucker was aware of the most serious kind of manipulation, known as “lowballing,” as early as August 2007.

US and UK regulators have fined banks billions of dollars for this behavior.

During the 2007-09 financial crisis, banks systematically underestimated the interest rates they paid to borrow money, a practice known as “lowballing.”

They did so by submitting daily estimates of their borrowing costs in order to create Libor, the benchmark interest rate that measures the cost of borrowing money between banks.


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