A former top Barclays executive admitted ordering staff to submit false interest rates during the credit crisis in 2008 because he believed his action had been sanctioned by the Bank of England.

Jerry del Missier told the House of Commons Treasury Select Committee on Monday that he drew that conclusion from a conversation with the bank's chief executive, Bob Diamond in October 2008.

He insisted that he believed he had done nothing wrong, and said he would not have given the order if he believed it had not been sanctioned by the Bank of England.

Del Missier resigned as Barclays' chief operating officer on July 3, hours after Diamond resigned — a month after he had been promoted from head of Barclays Capital to chief operating officer of the group.

'I passed the instruction as I had received it on '—Jerry del Missier

Barclays has been fined US$453 million by U.S. and British agencies for submitting false reports of its interbank borrowing rates, data which goes into the calculation of a key market index, the London interbank offered rate (LIBOR).

In his evidence to the committee on July 4, Diamond said that del Missier had misunderstood a memo dated October 30 2008 written by Diamond following a conversation with Paul Tucker, a senior figure at the Bank of England regarding Barclays' LIBOR submissions.

Diamond's memo said that "that while he (Tucker) 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."

Del Missier, however, said his understanding of what action to take came from a conversation he had had with Diamond before seeing the memo.

"I only know what I clearly recall from my conversation with Mr. Diamond," he said.

Central bank denies knowledge

Tucker, now a deputy governor of the central bank, has denied giving Barclays any encouragement to submit false rates.

Diamond said he didn't believe Tucker had sanctioned false submissions, and said he had not given that impression to del Missier.

"I passed the instruction as I had received it on to the head of the money markets desk," del Missier told the committee.

"I relayed the contents of the conversation that I had had with Mr. Diamond, and fully expected that the Bank of England's views would be incorporated in the LIBOR submissions."

Del Missier said he thought the order he gave was "appropriate given everything that was going on," but said he had not bothered to check whether it had been carried out.

"The entire financial system was hanging in the balance and in the grand scheme of everything that was going on, it didn't seem a significant event, given the number of significant events that were transpiring at that time."

Del Missier said that the LIBOR rate at the time was "hugely, hugely subjective." Other witnesses have said that there was very little interbank borrowing going on, either because banks were well capitalized or had just been bailed out by the government.

"The Bank of England, as the institution that is responsible for the stability of the system and has the expertise and visibility across the entire market, I mean, their views are extremely relevant here."

The false rates reported at this time were only part of the investigation. Investigators also found that individual traders at Barclays had persuaded colleagues to submit false rates in the hope of manipulating LIBOR to their advantage.