Bank of England Deputy Governor Paul Tucker denied "absolutely" that he encouraged Barclays Bank traders to manipulate key inter-bank lending rates, Tucker told British lawmakers on Monday.
Tucker, drawn into a rate-rigging scandal that has claimed the jobs of three top Barclays directors and threatens to engulf other banks, also said he had not been told by ministers to encourage rigging of the Libor rate.
Last week, Barclays released a written account of a telephone conversation its former chief executive Bob Diamond held with Tucker in 2008, prompting a storm of questions over the central bank's involvement in the affair.
According to the memo written by Diamond, who resigned last Tuesday over the scandal, Tucker had suggested that Barclays' Libor (London Interbank Offered Rate) submissions did not need to be as high as they had been.
Asked by parliament's Treasury Select Committee on Monday whether he denied telling Diamond that Barclays should manipulate the rates, Tucker replied: "Absolutely."
"The conversation with Bob Diamond was not a conversation that I made a note of or my private secretary made a note of," Tucker told the cross-party panel.
"Sitting here, I greatly wish there were a note of it," said Tucker, who had requested an appearance before the panel in order to give his version of events.
He added that Diamond's memo did "not completely" accurately reflect the content of the conversation and that the part about Libor "gives the wrong impression".
Barclays was fined £290 million ($452 million, 360 million euros) by British and US regulators for attempted rigging of Libor and Euribor interbank interest rates between 2005 and 2009.
Libor is a flagship reference worldwide, affecting what banks, businesses and individuals pay to borrow money. Euribor is the eurozone equivalent.
Giving evidence to the same parliamentary committee last Wednesday, Diamond told lawmakers he had not interpreted the phone call with Tucker as an order for Barclays traders to lie in their Libor and Euribor submissions.
The Libor interest rate is calculated daily by the British Bankers' Association (BBA), an industry body which uses estimates from banks of their own interbank rates.
A similar process exists to establish the Euribor.
But Diamond said that Jerry del Missier, who resigned as Barclays' chief operating officer last week over the scandal, had interpreted Tucker's remarks as an instruction to rig the rates.
Marcus Agius, who resigned as Barclays chairman over the affair, is due to give evidence to the Treasury Select Committee on Tuesday.
Britain's Serious Fraud Office launched a criminal investigation into scandal, while a European Commission probe will reach its conclusions in the next few weeks, a European commissioner said Monday.
