Bank of England plans shake-up to tackle forex probe
GOVERNOR Mark Carney vowed to restore the Bank of England’s credibility and repair financial markets yesterday, hiring a new deputy governor to investigate foreign exchange market manipulation claims.
Carney promised to “ruthlessly, relentlessly follow through with the investigation” into claims a Bank of England staff member had encouraged or turned a blind eye to traders’ attempts to manipulate a key FX benchmark. It came as Lloyds suspended another trader over suspected involvement in foreign exchange manipulation.
The Bank of England will recruit a fourth deputy governor to head up its markets and banks operations, whose first task will be to clean up the way the Bank works with traders.
“One of the tasks of that individual is that he or she will conduct a root and branch review of how we conduct market intelligence,” Carney told the Treasury Select Committee (TSC) in the House of Commons.
TSC chairman Andrew Tyrie MP said the Bank has been slow off the mark investigating the claims.
“This is the first real test for the Bank’s new governance structures. Early signs are not encouraging,” he said. Carney and director Paul Fisher said the Bank only heard about alleged manipulation in October 2013, rejecting contentions it knew about the claims as long as eight years ago.
Meanwhile, it was reported that a Lloyds trader may have tipped off colleagues about a large currency order earlier this year.
“We take individual allegations of this nature very seriously and we immediately launched an investigation into the specific allegations raised. The investigation is ongoing and at this stage it would be inappropriate to speculate on its outcome,” said Lloyds in a statement.