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| Bank of England to restructure following claims of rate rigging | |
| (35 minutes later) | |
| The Bank of England will restructure following claims that some of its officials knew about alleged foreign exchange rate fixing. | 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. | Governor Mark Carney told MPs on the Treasury Committee that it would create a new deputy governor position with responsibility for markets and banking. |
| He said the person would carry out "a root and branch review" of how the Bank conducts market intelligence, | He said the person would carry out "a root and branch review" of how the Bank conducts market intelligence, |
| But he said the Bank had no warning of the alleged manipulation before last October. | |
| "The institution has to be beyond reproach," he said. | "The institution has to be beyond reproach," he said. |
| The Bank currently has three deputy governors, with responsibility for monetary policy, financial stability and prudential regulation. | The Bank currently has three deputy governors, with responsibility for monetary policy, financial stability and prudential regulation. |
| The Treasury Committee hearing is aimed at finding out what Bank officials knew of the alleged foreign exchange rate fixing claims. | The Treasury Committee hearing is aimed at finding out what Bank officials knew of the alleged foreign exchange rate fixing claims. |
| Mr Carney said he first became aware of the allegations on 16 October. | Mr Carney said he first became aware of the allegations on 16 October. |
| And he said that within 48 hours of hearing the allegations, the Bank had called in law firm Travis Smith to conduct an independent investigation. | And he said that within 48 hours of hearing the allegations, the Bank had called in law firm Travis Smith to conduct an independent investigation. |
| Mr Carney said it had no information that anyone from the Bank condoned, facilitated or took part in market manipulation. | 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. | "We can't come out of this with a shadow of doubt about the integrity of the Bank of England," he added. |
| Awareness of claims | Awareness of claims |
| Mr Carney's appearance before the committee comes a week after it emerged that some officials were aware of market manipulation as early as 2006. | |
| The bank said there was no evidence its staff had colluded to rig the market. | The bank said there was no evidence its staff had colluded to rig the market. |
| But one member of staff has been suspended over compliance concerns. | But one member of staff has been suspended over compliance concerns. |
| Carney told the committee the decision to suspend the person was taken by governors, and that "we hold staff to very high standards". | Carney told the committee the decision to suspend the person was taken by governors, and that "we hold staff to very high standards". |
| The minutes of meetings from 2006 were published last Wednesday following a Freedom of Information request. | 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. | 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. | 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. | 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. | 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". | 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. | "It isn't our job to go out hunting for rigging of markets," he adds. |
| 'As bad as Libor' | 'As bad as Libor' |
| Regulators have expressed concern that alleged forex manipulation could become the latest banking scandal. | Regulators have expressed concern that alleged forex manipulation could become the latest banking scandal. |
| Traders are alleged to have colluded in setting certain key exchange rates in the foreign exchange market, resulting in big profits. | Traders are alleged to have colluded in setting certain key exchange rates in the foreign exchange market, resulting in big profits. |
| The head of the Financial Conduct Authority, Martin Wheatley, said last month that currency manipulation was "every bit as bad" as the Libor scandal, where banks including Barclays, Royal Bank of Scotland and UBS paid fines totalling $6bn relating to fixing inter-bank lending rates. | The head of the Financial Conduct Authority, Martin Wheatley, said last month that currency manipulation was "every bit as bad" as the Libor scandal, where banks including Barclays, Royal Bank of Scotland and UBS paid fines totalling $6bn relating to fixing inter-bank lending rates. |