Prior to Bob Diamond’s U.K. Treasury Select Committee hearing on the firm’s manipulation of Libor, commentators alluded to the impact Diamond’s comments would have on the integrity and career of Paul Tucker, deputy governor, financial stability at the Bank of England. Yet, Diamond’s comments were never in doubt, despite news reports suggesting that some of his advisors wanted him to pin Tucker’s warnings in a phone call in 2008 as a nod and a wink for Barclays to fund itself at cheaper rates. In the committee, Tucker was praised by the former Barclays ceo for doing his job and making the call, and that Tucker’s warnings were not taken as an instruction to manipulate Libor, as stated in documents released by U.K. and U.S. regulators last week over the Barclays Libor investigation.
Although questions will be asked of Tucker’s actions during 2008 at a forthcoming Treasury Select Committee, which Tucker has requested, market officials note his career and reputation is not and never was in doubt. Even if further banks fall foul of Libor manipulation over the coming weeks and months, you can be sure that those appearing on behalf of the banking community will not point the finger at the BoE’s Tucker, who in 2008 was head of the central bank’s markets division.
There are many reasons for this, mainly driven by Tucker’s consistent performance at the BoE across many of its divisions. Even those financial professionals that have criticized certain areas of U.K. and global regulatory action over recent years have stayed well clear of criticizing the actions of Tucker.
This is due to the contribution that Tucker has made to the swaps and derivatives community in a career spanning over 20 years and the position he holds in shaping its future. Over the last decade he has reformed the gilts and sterling money markets, and going forward, he will have a significant impact on the global financial markets landscape as chair of the Basel Committee on payment and settlement systems and co-chair of the CPSS/IOSCO steering group on central counterparties.
MPs will no doubt attempt to give Tucker a grilling when he appears before the Treasury Select Committee in the next few days or weeks, yet the result of the hearing will likely not even register as a pot hole on his road to becoming a future BoE governor.