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Banks Draw Battle Lines Over Rate Row

(c) Sky News 2012

Bank of England deputy governor Paul Tucker has requested his own hearing with the Treasury Select Committee to apparently counter Barclays (LSE: BARC.L - news) ' account of his alleged role in the rate-fixing row.

Mr Tucker asked to attend a hearing with the committee, chaired by Andrew Tyrie MP, as soon as possible.

The move follows the publication of settlement agreements by Barclays with US and UK regulators over the rigging of Libor and Euribor, after which Barclays was fined £290m.

:: Read how the share price of Barclays was affected as Mr Diamond gave evidence on July 4

The hearing request comes after claims he told the then head of Barclays Capital, Bob Diamond, that "senior Whitehall figures" had questioned the bank's position on the inter-bank rates.

Mr Tucker is apparently eager to challenge the recollection of Mr Diamond and Barclays, in particular regarding the telephone conversation with Mr Diamond on October 29, 2008.

During Mr Diamond's evidence to the Treasury Select Committee (TSC) on Wednesday afternoon, he was asked what his interpretation of Mr Tucker's alleged use of the term Whitehall meant.

"In my mind, officials in the Government," Mr Diamond said.

Pushed further on their identity, Mr Diamond described them as "senior people in the Government".

:: Read more about Mr Diamond's evidence to the committee and how he was "physically ill"

The men's evidence comes after Barclays published a swathe of documentation to support its position ahead of an appearance by Mr Diamond, who resigned as CEO on Monday.

The bank, whose name has been increasingly tarnished after being fined over fixing of the Libor rate for US dollars, has sought to explain its actions in a scandal that threatens to engulf other global banks.

"These explanations are in no way intended to excuse any of the events that occurred," Barclays said on its corporate website.

"These events should never have taken place, and Barclays deeply regrets that they did."

Barclays said its own internal investigation cost millions and included reviewing documents held by more than 200 custodians.

:: Read More - The Sky News Blog During The Diamond Grilling

The bank appeared aggrieved that its willingness to help authorities investigate previous behaviour has backfired, in PR terms.

"It is ironic that there has been such an intense focus on Barclays alone, caused by our being first to settle in the midst of an industry-wide, global investigation," the bank said.

But questions remain about elements of the Barclays' investigation and its internal disciplinary procedure to penalise those involved - as many complicit traders have already left the firm.

It said: "Where possible, robust action has or will be taken to hold those responsible to account."

However, it added that "less senior managers" told some 14 traders to drop the submissions but admitted "the origins of these instructions is not clear".

It confirmed the Libor rate submissions were lowered after Mr Tucker telephoned Mr Diamond.

It said a subsequent briefing note send by Mr Diamond to the then chairman John Varley - CCed to colleague Jerry del Missier - was erroneously interpreted by the latter as an instruction to lower rates by the Libor submitters.

Questions remained, however, after Mr Diamond's evidence to the TSC.

Mr Diamond told MPs (BSE: MPSLTD.BO - news) he spoke to Mr del Missier every day, and yet there was a significant miscommunication about the October 29 file note.

The competency of Mr Diamond to be CEO of a large global bank was further questioned after an admission he only learned of the Libor rate-fixing last month.

That revelation appeared incredulous to some TSC members, especially after his firm revealed on Tuesday night it spent nearly £100m on the internal investigation, listened to one million audio recordings, reviewed more than 22 million documents and interviewed dozens of employees.