By Douwe Miedema and David Milliken
LONDON (Reuters) - The Bank of England defended its role in the global interest rate-rigging scandal on Friday, publishing a host of emails that showed it put pressure on the body responsible for the contested Libor benchmark in 2008 and then signed off on proposed changes.
Governor Mervyn King, who in a parliamentary hearing this week came under fire over a lack of oversight of the widely used benchmark during the credit crisis, had called an initial plan by the group "wholly inadequate".
A debate sparked by the U.S. Federal Reserve lead to some tweaks to the way Libor is set late in 2008, the emails between King, his deputy Paul Tucker and Angela Knight - the head of the British Bankers Association (BBA) - show.
But there is no evidence of any follow-up after the BBA announced the changes in December 2008.
"I'm inclined to think the bba sh(oul)d put out a proposal for consultation. I don't see that a group of junior bankers in london can decide this without a global debate," Tucker said in an email on May 19, 2008.
It then turned out that the BBA had already started an internal debate about whether Libor - the London Interbank Offered Rate, which underlies hundreds of trillions worth of financial contracts - was still adequate.
But in a hand-written note on one of the emails, King said: "This seems wholly inadequate. What shall we do?"
The emails also showed that Knight said she had discussed Libor "at some length" with the Fed in that period.
The Fed also thought the changes didn't go far enough. There were then further discussions about the BBA's draft paper, and both central banks gave the plan their broad blessing, though some points were left open for further discussion.
More than a dozen banks, including Citigroup
Thomson Reuters Corp
(Additional reporting by Sven Egenter, Steve Slater and Kylie MacLellan, Editing by Jeremy Gaunt.)