Osbourne is saying that Balls "has questions to answer".
Seems a reasonable stance to me.
I think we'd all agree that any government in power when something like this was going on under their noses would have questions to answer.
Of course, he may have been implying that he thinks Balls was fully aware of the conversations that his fellow ministers were having with this Bank of England chap who in turn was pressurising Barclays to think about what they could be doing differently with the Libor rate, but, being a politician Osbourne stopped short of a direct accusation. That's what all politicians are good at... saying what they want people to hear without actually saying it.