July 16, 2012 / 3:18 PM / 5 years ago

HIGHLIGHTS-Parliament hearing with former Barclays COO

LONDON, July 16 (Reuters) - The former chief operating officer of Barclays, Jerry del Missier, appeared before a House of Commons Treasury Select Committee on Monday to answer questions as part of a probe into the Libor interest rate rigging scandal.

Following are comments from del Missier:

ON THE DAMAGE TO THE BANK

"I deeply regret what it has done to tarnish the brand. The overwhelming majority of people in the organisation are highly ethical.

"It is extremey difficult to see how one rate would have an impact and how that would necessarily flow through. I don't know why they have done it. it makes it all the more galling that the reputaiton of the whole org has been tarnished in this way."

ON THE TUCKER-DIAMOND CALL

"It is a significant piece of information that at the time when the financial crisis was at its very peak that the central bank - at a time when governments are tangibly calling the shots - are passing on that kind of information."

ON COMPLIANCE FAILURES AT THE BANKS:

"There was a message sent to compliance ... but compliance never followed it up. The money market desk informed compliance of the request that had come in. There was no closing of the loop."

ON HIS RESIGNATION:

"I don't think I am acting as a fall guy. I resigned my position from the bank for the good of the bank. I am not the fall guy for anything."

Asked whether this was a cover up or incompetence? "I can understand, given the circumstances we find ourselves in, there is resentment towards Barclays and the banks."

ON THE FSA:

"In September (2011) the FSA informed me no action would be taken, there would be no follow up ... I was cleared."

ON CONTACTS WITH BOE'S TUCKER:

"I took the action on the basis of the phone call that I had had with Mr Diamond.

"He said that he had a conversation with Mr Tucker of the Bank of England, that the Bank of England was getting pressure from Whitehall around Barclays, on the health of Barclays as a result of Libor rates and that we should get our Libor rates down and that we should not be outliers."

Asked did he regard it as an instruction from the Bank of England or authorities? "From the Bank of England."

Asked how he had misunderstood the conversation? "I can only tell you what I clearly recall from the conversation. I was not on the call with Mr Tucker. I cannot speak to what Mr Diamond recalls. I can only tell you what I recall."

ON THE INSTRUCTION:

"At the time it did not see an inappropriate action given that this was coming from the Bank of England."

Asked was it an instruction from Mr Diamond to you to lowball libor? "Yes it was."

"I passed the instruction on to the head of the money market desk. I relayed the content of the conversation I had with Mr Diamond and fully expected the Bank of England views would be fully incorporated in the Libor submission. I expected that they would take those views into account."

ON LOWBALLING LIBOR:

Asked do you consider loballing to be improper? "No I don't. The notion of manipulation is something that is very difficult to contemplate.

"I regret the fact that Barclays' reputation has been

ON TIMING ISSUES:

"I was not aware there was any pressure applied to any of the Libor submitters in 2007. I first found out about that in late 2009, early 2010 as the investigation went on. I became aware of the scale."

ON CONTROL AT THE BANK:

"There was clearly a breach of fundamental control and that is exactly why we found ourselves in this position and why we paid a large fine and why we instituted significant enhancements as a result of that."

ON THE LIBOR RATE:

"At the time the rate was hugely subjective. At the time it seemed appropriate given everything that was going on.

ON THE MANIPULATION OF LIBOR:

"The manipulation of Libor is illegal, according to what you have just read."

WAS THIS A SIGNIFICANT EVENT:

"There were many, many big events going on in this period. The entire financial system was hanging in the balance and in the ... scheme of things that was going on it didn't seem a significant event, given the number of significan events that were transpiring at the time."

Asked was he aware of any other market manipulation apart from Libor during your time in Barclays? "Not that I am aware of."

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