[ by Melanie Gretchen ] Did Barclays get the green light from the Bank of England?  Although the British bank is the only one to have settled accusations that it manipulated Libor with a $450 million payment, former CEO Robert Diamond Jr. testified Wednesday that Barclays suspected that other banks were reporting false figures – and the Bank of England may have had a hand in perpetuating it. Taking a Cue from the Bank of England. Starting in October, the bank began illegally reporting low borrowing to compete in the market, following a conversation Mr. Diamond had with Paul Tucker, deputy governor of the Bank of England.  On 10/29/09, Mr. Tucker, called Mr. Diamond, according to a note recorded by the former CEO.  Mr. Tucker wanted to know why Barclays was reporting higher borrowing rates.

"I asked if you could relay the reality, that not all banks were providing quotes at the levels that represented real transaction.  His response (was) 'Oh, that would be worse.'"

Mr. Diamond's note includes Mr. Tucker telling the CEO "that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently." Moving Down the Line. While Mr. Diamond did not receive this as an order from Mr. Tucker, someone else did:  COO Jerry del Missier understood the deputy governor had ordered the bank to report lower rates, which Mr. Tucker was "quite keen" to testify about, according to the Bank of England.   Since the settlement was announced, both the CEO and the COO have resigned, in addition to chairman Marcus Agius, who will stay on to choose Mr. Diamond's predecessor.  Although Mr. Diamond has resigned, he maintains that Barclays had no influence on the final Libor calculation.  For its part, the bank itself has denied knowing of any impropriety in setting Libor. CI Takeaway. Although Barclays has said it had no intention of manipulating LIBOR in 2008, it succeeded in doing so;  Mr. Diamond has identified 14 traders working to protect their own positions starting in 2005.  And yet, it was not successful because, insofar as its rates were not lowered as much as other banks, its higher reports made it the only bank to raise red flags during the credit crisis – thus giving up the game. Perhaps Barclays got caught because they weren't manipulative enough. For further details, go to [NY Post, 7/4/12].