Published on 5 Mar 2015

Bank of England fraud probe: serious questions to be answered

Of all the revelations that have come to light since the great financial crash of 2008, the idea that the Serious Fraud Office has opened an investigation into goings-on at the Bank of England is potentially the most shocking of all.

While we don’t have any detail yet the implication is that bank traders rigged the market during the emergency money auctions designed to prop up the banks at the height of the financial crisis.

It’s sickening enough that the very auctions that were supposed to keep the banks afloat could themselves have been subject to the kind of skullduggery that we’ve witnessed in other markets such as libor and forex. But on some level the public has perhaps come to expect that there are no depths to which Britain’s bankers would not sink.

But the Bank of England? The very pillars of our economy? The people charged with keeping it all together when everyone else appeared to have lost their heads?

I say this because the other potentially very serious implication here is that Bank of England staff knew about the rigging, and did nothing, or worse still colluded in some way.

The Bank of England said late last night it had “commissioned Lord Grabiner QC to conduct an independent inquiry into liquidity auctions during the financial crisis in 2007 and 2008.”

It said that following the conclusion of the inquiry, the Bank then referred the matter to the SFO on 20 November 2014.

At the very least it’s awkward that the Bank appeared to be bumped into putting out a statement late last night after the Financial Times had published its front page calling into question the Bank’s actions.

The statement came just a day after Mark Carney, the Bank’s governor, appeared in front of the Treasury Select Committee. He was answering questions about Lord Grabiner’s investigation into what the Bank knew, when about the forex rigging scandal. But there was no mention of the second investigation Lord Grabiner had been commissioned to conduct into liquidity auctions.

Yet 24 hours later the Bank is forced to admit there was one.

One reason for the silence could simply be that it’s hard to speak about these matters if the SFO is conducting a probe. But as one MP from the committee said to me this morning. “If we knew then what we know now, Tuesday’s questioning would have been very different.”

Either way, it’s not Mark Carney that should be questioned here. It was the former governor Mervyn King in control back then. His views on the matter would certainly be very interesting indeed.

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4 reader comments

  1. Alan says:

    Is this more shocking than a PRIVATE bank such as the Bank of England being bailed out by the taxpayer? That the lions share of taxes goes to pay off the interest charged by this private bank. That imposed ‘austerity’ ensures the shareholders of this and other private banks flourish? Mr King represented the Bank of England’s shareholders, it is those shareholders that need to be held to account. Unfortunately due to government enacted laws the names of those shareholders cannot be disclosed. As per the ‘usual suspects’ remain hidden from public scrutiny.

  2. Philip Edwards says:

    Siobhan,

    Why the air of Shock Horror?

    It’s the way capitalism works.

    So either you and your family get ready to shuffle quietly into the dole queue while reading the Sun or the Daily Mail, or fight back.

    Eventually they’ll steal everything not nailed down. Always have, always will – which is why I am not shocked.

    There isn’t one element of the London based establishment that hasn’t been exposed as rotten to the core, and getting rottener by the day. It stinks the country out with its smell.

    You should know. You work and live right next to it. All I can say is I’m glad I don’t bring my kids up anywhere near it.

  3. anon says:

    excellent work from Channel 4 News as always; how is it for those who have so much good health, careers, money, it simply isn’t enough and they break the ‘rules’ (if there are any in the swamp?) conversely those with little are much happier sometimes, what does this tell us about the road to happiness? money really doesn’t make anyone happier,

    do you think at some point some of the stories Channel 4 have being covering over the last couple of horriblis years will start to join up?, a bit like the crack in the earth film

    http://en.wikipedia.org/wiki/Crack_in_the_World

    that it could reach a tipping point when there will such an accumulation of human greed, avarice, and wickedness that there will be some sort of meltdown, and kaboom off they will all go in a metaphorical purging of the lot of them, and then a more just decent kinder type of world will come in instead with core values and deep rooted foundations of trust

    thank you again

  4. anon says:

    this might not be postable, re the Mail on Sunday story, if this is true what do we do now? in the public domain there are some dreadful stories from Northern Ireland, if these are true what does that tell us? there are other stories about people actually being killed linked to appalling stories from the mainland, what would that tell us if true? would it mean that those who may be trying to sort things out may also have to look out for their own wellbeing too? not because they have put themselves first, but because if they fall, (too?) justice may not be fall too?, ie what is the military maxim? a good, sorry typo put God, soldier does not lay down his life lightly? sounds like a bad dream? what did I drink last night !

    ps where is Chilcot in all this?

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