By insisting on telling his story, Mr. Tucker accomplishes exactly one thing: he confirms beyond any doubt that the regulators' information monopoly must be ended and banks required to provide ultra transparency and disclose on an on-going basis their current asset, liability and off-balance sheet exposure details.
Why does Mr. Tucker telling his side of the story only confirm the need for ultra transparency?
Ultra transparency would have made a call about Barclays' Libor submissions unnecessary and the subsequent misinterpretation impossible as the submissions would have been based off of actual trades.
Your humble blogger assumes that the real reason for the call was the Bank of England was justifiably concerned that Barclays was withholding information on its true financial condition.
The call was simply to confirm that the higher Libor submissions were not a function of the market knowing something that the Bank of England didn't know.
This is further confirmation of the need for ultra transparency.
It is only with ultra transparency that all market participants have the same information.
Update
08.15 BBC Business Editor Robert Peston has been speaking to Radio 4 on the Barclays scandal:
The Bank of England says [BoE deputy governor] Paul Tucker didn't do anything wrong, and did not instruct Barclays to change Libor... It would be amazing if the TSC didn't call him to give his side of events.
"It's inconceivable that the Bank of England and Barclays did not have a conversation around how to get Libor rates lower, and that Paul Tucker gave a hint Barclays should be doing this. Banks regard Paul Tucker as a hero for doing this.
"But the TSC has to look at why investors were so scared about Barclays going bust [because Libor was high].Investors were scared because of the opacity of Barclays (and every other bank). As the Bank of England's Andrew Haldane says, banks are 'black boxes'.
Had there been ultra transparency, investors would have known the true condition of Barclays.
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