[ by Howard Haykin ] Today, British political leaders focused their attention on some senior officials with the Bank of England, who may turn out to be co-conspirators in at least Barclays' rate manipulation scandal. Paul Tucker, a deputy governor at the Bank of England, a front-runner to replace Mervyn King next year as head of Britain's central bank, testified to a British parliamentary committee on Monday.  As expected, Mr. Tucker defended the Bank of England's role in the rate manipulation scandal, having this to say:

• Senior officials had maintained regular contact with senior officials at Barclays after the collapse of Lehman Brothers in 2008 out of fear that the British bank might need to be bailed out.
• During these " completely extraordinary times," "two banks had been taken under the government's wing, so Barclays was next in line."

Mr. Tucker presented a completely different picture from the one offered by Robert "Bob" Diamond Jr., who recently stepped down as CEO of Barclays.  Diamond told the same committee last week that senior BoE officials had been repeatedly told about efforts to influence key interest rates, but said regulators had not moved to stop it. Besides agreeing to pay $452 million in penalties, the Barclays house was cleared of several top executives - CEO Diamond, COO Jerry del Missier - both of whom resigned - and Chairman Marcus Agius, who will step down from his post.  He's scheduled to testify before the parliamentary committee tomorrow, on Tuesday. The European Commission ... added its weight to the day's events, when Michel Barnier, the financial services commissioner, said he would propose amendments to draft market abuse legislation that would outlaw the manipulation of Libor and other benchmark rates. Parliamentary Concerns with BoE Senior Officials. Mr. Tucker testified before British politiciams who suspect that bank officials may have had an involvement - i.e., by directing Barclays to alter its Libor submissions.  After all, the politicians have had a full week-end to ponder Diamond's accusations that senior British officials had raised concerns that Barclays' Libor submissions were higher than those of rivals.  As a result, the politicians focused their questions on a conversation between Mr. Tucker and Mr. Diamond at the end of October 2008. Mr. Tucker responded by saying the worries from authorities were linked to fears that the financial markets might perceive Barclays to be at risk if their Libor submissions continued to be higher than those of other international banks.  "I wanted to be sure that senior management at Barclays was overseeing the day-to-day financing requirements," he told the parliamentary committee. E-mails released by the Bank of England before Mr. Tucker's testimony revealed that senior British officials were worried about banks' access to the financial markets in the aftermath of the collapse of Lehman Brothers in 2008.  In one, Jeremy Heywood, a senior British civil servant, told Mr. Tucker by e-mail on 10/22/08:  "We are [very] concerned that U.S. rates are tumbling but we remain stuck." Mr. Tucker also was in almost daily contact with senior Barclays executives during the final weeks of October, 2008, according to the documents.  He contacted Mr. Diamond on 10/25/08 saying he was "struck" that Barclays was paying a high interest rate on its loans, even though they were backed by British government guarantees. Mr. Tucker also asked to meet the former Barclays chief in person to discuss the funding issues. A few days later, Mr. Diamond sent a separate e-mail to the Bank of England deputy governor with details of a £3 billion ($3.6 billion) bond that Barclays had issued, in an effort to quell officials' fears that the British bank was having financing problems.  "Investor confidence is slowly (very slowly) returning," Mr. Diamond wrote on 10/30/08. Damage to Tucker's Reputation. Mr. Tucker, 54, has been with the Bank of England for more than 30 years.  After working briefly at the British bank Baring Brothers and with the Hong Kong government in the 1980s, he rose inside the Bank of England to become the central bank's deputy governor in charge of financial stability in 2009. He's also a leading figure in global efforts to overhaul financial regulation, holding senior positions at both the Financial Stability Board and the Global Economy Meeting, whose memberships comprise officials from the world's leading central banks.  Mr. Tucker also is known for his practical knowledge of the financial markets as well as for a track record of backing extra support to finance British banks during the recent economic crisis. Yet first impressions are difficult to dispel and his ties with Barclays during the Libor scandal has hurt Mr. Tucker's reputation - and, to certain individuals connected to the Bank of England, it looks as though Tucker may have missed signs that rate manipulation was happening. For further details, go to:   [Dealbook, 7/9/12].