Bank fights back over Libor claims

City Editor ThE Bank of England closed ranks around Governor sir mervyn King yesterday, releasing a tranche of emails that appeared to show a concerted effort to strengthen the integrity of Libor.

The Bank has come under fire for an apparent failure to strongarm the British Bankers’ association, which regulates the benchmark interest rate, into reforming the way it was determined.

But a string of emails and letters appear to show that the Bank was at the centre of efforts to improve Libor.

King branded the BBa’s initial suggestions for changing the Libor process as ‘wholly inadequate’ and demanded that its chief executive angela Knight show ‘greater energy’ in reviewing the rate.

The exchanges also back up King’s assertion that although Tim Geithner, then the chairman of the us Fed, expressed concerns about Libor’s vulnerability, he did not pass on evidence that Barclays was rigging the rate.

a statement accompanying the correspondence, released at the request of the Treasury committee, hammers home the point.

It states that ‘the Geithner memorandum contains no allegation of wrongful behaviour’.

It adds: ‘at no point did the FrBNY [Federal reserve Bank of New York] draw the attention of the Bank to evidence of wrongdoing in the setting of BBa