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12 Nov 2014
Bank of England publishes report into FX rate rigging
Following the investigation into the FX rate fixing scandal, the Bank of England Oversight Committee has today published an independent report by Lord Grabiner QC. The investigation looked into whether between 2005 and 2013, any Bank of England official was involved in, or aware of, conduct issues in the foreign exchange market.
The key findings of Lord Grabiner’s report are:
- There was no evidence that any Bank of England official was involved in any unlawful or improper behaviour in the FX market.
- A substantial part of the FCA’s investigation, also announced today, concerns FX traders sharing confidential information, including aggregated information about client orders, which was then used for improper behaviour. No Bank of England official was aware that this improper behaviour was happening.
- One Bank official was aware that bank traders were sharing aggregated information about client orders for the purpose of ‘matching’ – a practice that is not necessarily improper, but can increase the potential for improper conduct – and was uncomfortable with the practice in that it could involve collusive behaviour and lead to market participants being disadvantaged. Notwithstanding those concerns, the Bank official did not escalate the matter to an appropriate person.
- This constituted an error in judgment that deserved criticism, but such criticism should be limited in that the individual was not acting in bad faith, nor was the individual involved in any unlawful or improper behaviour, nor aware of specific instances of such behaviour.
The full text of the report can be found here.
The key findings of Lord Grabiner’s report are:
- There was no evidence that any Bank of England official was involved in any unlawful or improper behaviour in the FX market.
- A substantial part of the FCA’s investigation, also announced today, concerns FX traders sharing confidential information, including aggregated information about client orders, which was then used for improper behaviour. No Bank of England official was aware that this improper behaviour was happening.
- One Bank official was aware that bank traders were sharing aggregated information about client orders for the purpose of ‘matching’ – a practice that is not necessarily improper, but can increase the potential for improper conduct – and was uncomfortable with the practice in that it could involve collusive behaviour and lead to market participants being disadvantaged. Notwithstanding those concerns, the Bank official did not escalate the matter to an appropriate person.
- This constituted an error in judgment that deserved criticism, but such criticism should be limited in that the individual was not acting in bad faith, nor was the individual involved in any unlawful or improper behaviour, nor aware of specific instances of such behaviour.
The full text of the report can be found here.