While Fed chief Ben Bernanke, aka the Oracle of Helicopterus, was being grilled today by the Senate Banking Committee (see separate slug), his British counterpart, Bank of England head Mervyn King, was testifying before the British Parliament's Treasury Select Committee. Both were engaging in a full-scale attempted cover-up of the LIBOR scandal, and their respective participation in the crimes.
The King appearance was shaped by earlier press reports that his deputy Paul Tucker had told Barclays officers to lower their Libor rate. In testimony Monday, intended scapegoat Jerry del Missier, former chief operating officer at Barclays, confirmed that he had received a phone call in October 2008 from Barclays' then-CEO, Bob Diamond, telling him to "get our LIBOR rates down." He added that Diamond "said that he had a conversation with Mr. Tucker ... that the Bank of England was getting pressure from Whitehall around Barclays" — i.e., that the order to criminally fix the LIBOR rate had come from the British government itself, through the Bank of England.
King's testimony can be summarized as: Gosh, Timmy and I didn't know anything about the terrible fraud being perpetrated by those naughty bankers. "Mr. Geithner was sending that [e-mail] to us as a suggestion for how these rules should be constructed, and we agreed with him, but neither of us had evidence of wrongdoing," King said. "The first I knew of any alleged wrongdoing was when the reports came out two weeks ago."
King did admit, however, that he had a "desire" to reduce LIBOR, but he insisted he didn't "tamper with the thermostat." And as if to justify the crime he claims he didn't commit, he explained: "We have a 500-trillion-pound market in derivatives; most of the time the reference point [LIBOR] is well known... Does it make sense to base contracts on a rate [which is so volatile]?"