“We can’t come out of this with a shadow of doubt about the integrity of the Bank of England,” Governor Mark Carney told MPs this morning on the heels of the report, as we noted here, that found no collusion by the bank to manipulate FX rates. A senior BoE employee was told of “attempts to move the market” but “did not convey to [Monetary Policy Committee member Paul Fisher] that markets were being rigged,” and therefore was suspended. While many have called this “as bad as Libor” the BoE remains adamant of its lack of involvement but is still restructuring itself – adding that “it isn’t our job to go out hunting for rigging of markets.” Nope, just to ignore it, we presume. MPs were not impressed.
The Bank of England will restructure following claims that some of its officials knew about alleged foreign exchange rate fixing.
Governor Mark Carney told MPs on the Treasury Committee that it would create a new deputy governor position with responsibility for markets and banking.
But he said it had no warning of the alleged manipulation before October.
The Bank currently has three deputy governors, with responsibility for monetary policy, financial stability and prudential regulation.
The Treasury Committee hearing was aimed at finding out what Bank officials knew of the alleged foreign exchange rate fixing claims.
Mr Carney said it had no information that anyone from the Bank condoned, facilitated or took part in market manipulation.
“We can’t come out of this with a shadow of doubt about the integrity of the Bank of England,” he added.
The bank said there was no evidence its staff had colluded to rig the market.
The minutes of meetings from 2006 were published last Wednesday following a Freedom of Information request.
They show that a senior member of the Bank of England’s staff was told of “attempts to move the market” at a meeting with senior foreign exchange dealers from some of the world’s largest banks.
Traders are alleged to have communicated with each other to agree the rate of exchange for foreign currency deals.
It is thought some traders may have used online chat rooms to set a benchmark for currency trades.
Andrea Leadsom said that the minutes should have set off alarm bells.
However, Monetary Policy Committee member Paul Fisher, also appearing in front of the committee, said those minutes “did not convey to me that markets were being rigged”.
“It isn’t our job to go out hunting for rigging of markets,” he adds.
But, as Bloomberg notes, this is far from over…
Uk Treasury Committee Chairman Tyrie Says Early Signs From Boe Response To Fx Rigging Allegations Are Not Encouraging