Senior managers at Barclays have warned staff in an internal memo that the Libor scandal will envelop other banks.The memo circulated on Friday said that revelations about its rivals would put in perspective Barclays culpability.Meanwhile Barclays former chief operating officer Jerry del Missier will answer MPs questions on Monday.Mr del Missier stands accused of having mistakenly believed Barclays was told by the Bank of England in 2008 to under-report its borrowing cost.Libor - the London Interbank Offered Rate - is a benchmark interest rate set each day by the British Bankers Association based on the interest rate that 16 major international banks based in London tell it that they must pay in order to borrow cash from other banks.It is used as a benchmark rate for trillions of pounds worth of financial contracts, including some mortgages.According to Barclays own explanation of events in October 2008, the height of the crisis, the banks then-head of investment banking, Bob Diamond, discussed Barclays persistently high Libor submissions with the Bank of England deputy governor Paul Tucker.There were fears that Barclays apparent high cost of borrowing compared with other banks could be interpreted by the financial markets as a sign that the bank was in trouble.According to Barclays, Mr del Missier then misinterpreted Mr Diamonds summary of the call to mean that the Bank had given Barclays permission to under-report its own borrowing costs in order to appear to be in line with other banks.On Monday, Mr del Missier will follow Mr Tucker, Mr Diamond - who recently resigned as chief executive - and Barclays chairman Marcus Agius, who all appeared before the Commons Treasury Committee earlier this month.Let downMeanwhile, it appears that Barclays believes other banks will soon turn out to be more culpable in the scandal than themselves.According to the Barclays memo to staff: As other banks settle with authorities, and their details become public, and various governments inquiries shed more light, our situation will eventually be put in perspective.The memo, from Mr Agius and other senior executives, admitted that customers, shareholders and regulators all have a right to feel let down by the bank after it admitted to manipulating Libor, and incurred a £290m ($450m) fine from UK and US regulators.Several banks are currently being investigated, both in the UK and the US, for allegedly manipulating Libor.On Friday it emerged that the Federal Reserve Bank of New York - which is responsible for overseeing banks in the US city - discussed concerns about the way Libor was being set as early as May 2008.Timothy Geithner, the current US Treasury Secretary and who headed the New York Federal Reserve at the time, emailed the Bank of England Governor Sir Mervyn King with suggestions for how to prevent misreporting by the banks of their true borrowing costs.However, the email does not specify evidence given by the Barclays employee and it is unknown to what extent the Bank of England governor was aware of the wrongdoing.BBC
