Bank of England suspends official in FX fixing probe

Wed Mar 5, 2014 1:47pm EST
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By Jamie McGeever

LONDON (Reuters) - The Bank of England suspended a staff member on Wednesday as part of a probe into what it knew about alleged manipulation of world currency markets and revealed that rigging allegations had been flagged as far back as mid-2006.

The so-called fixings that are at the center of a global investigation into allegations of manipulation by traders are used to price trillions of dollars worth of investments and deals and relied upon by companies, investors and central banks.

What the British central bank knew about practices in its role monitoring the largely unregulated $5.3 trillion-a-day currency market has become a focus of a probe into alleged collusion between dealers at some of the world's biggest banks.

Regulators have said the alleged foreign exchange manipulation is as bad as the Libor interest rate rigging, which has resulted in banks shelling out $6 billion in fines and settlements and criminal cases being brought against some individuals.

A BoE internal review had so far found no evidence that its staff colluded in any manipulation or shared confidential client information, the central bank said on Wednesday.

"However, the Bank requires its staff to follow rigorous internal control processes and has today suspended a member of staff, pending investigation by the Bank into compliance with those processes," it said in a statement.

"The Bank has today re-iterated its guidance to staff regarding management of records and escalation of important information," it added.

A bank spokesperson declined to comment on the identity of the individual or give further details about the suspension.   Continued...

A man travels in a double-decker bus as it passes the Bank of England in central London March 24, 2010. REUTERS/Darrin Zammit Lupi