THE Bank of England inadvertently sanctioned the manipulation of interest rates because it thought Libor was a powerful disinfectant.
It has been revealed that Barclays traders believed they had the go-ahead to falsify interest rates after the Bank’s deputy governor Paul Tucker said Libor should go ‘below the rim’.
A source said: “Barclays chief Bob Diamond asked Tucker what they should do with Libor and after a very long pause Tucker said ‘follow the instructions on the bottle and then flush twice’.
“Bob assumed this was some sort of code.
“Tucker then said that without squeezing the Libor everything would become ‘very stinky’. Bob, quite rightly, took this to be a ringing endorsement.”
A Bank of England spokesman said: “London Inter-Bank Offered Rate? I have no idea what any of that means. What, for example, is a ‘London’?
“If someone says a word that you have never heard before it’s perfectly normal to assume that it’s a cleaning product.”
Meanwhile, experts said that the Bank’s accidental complicity in defrauding everyone means the financial industry will now have to be regulated by Kevin McCloud from Grand Designs.