Barclays has released a memo from Bob Diamond that claims to show a conversation with the Bank of England led to the rate-fixing scandal, in a signal that the former CEO is set to declare war on government officials.
In the email dated 29 October 2008, Diamond said Paul Tucker, the deputy governor of the Bank of England, had told him "you have to pay what you have to pay" after bringing up the issue of the bank's Libor rate.
He said Tucker told him "it did not always need to be the case that we appeared as high as we have recently."
The memo comes just hours after Diamond stood down from his post as CEO of the bank and one day before he is set to face MPs over the Libor-fixing scandal.
Barclays has submitted a copy of Diamond's note on his conversation with Paul Tucker, to the Select Committee.
Jerry Del Missier, who was president of investment arm Barclays Capital at the time of the email, told staff to lower the key interbank lending rate after misunderstanding Diamond's account of the conversation with the BoE deputy governor Paul Tucker.
Del Missier also stepped down from his role as chief operating officer on Tuesday following increased pressure from politicians, shareholders and former Barclays directors in the wake of the scandal.
Diamond's call to Paul Tucker could have led to the lowering of the Libor rate
Diamond said Tucker had flagged concerns from senior figures in Whitehall over why Barclays was always towards the top end of Libor pricing.
Diamond wrote: "His (Tucker's) response was 'you have to pay what you have to pay'."
Diamond said he asked Tucker to explain to his Whitehall contacts that other banks were providing Libor quotes that did not represent real transactions.
Del Missier apparently misconstrued the phone call, ordering submitters to lower the rate
The American banker then said Tucker told him the bank's Libor rate did not "always" need to appear as high as it had recently.
Barclays went on: "Subsequent to the call, Bob Diamond relayed the contents of the conversation to Jerry del Missier.
"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."
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- Inter-Bank Review To Be Set Up In Wake Of Libor Revelations
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