BoE discussed FX fixing process with chief dealers -document
By Jamie McGeever
LONDON Jan 15 (Reuters) - Bank of England representatives discussed the process of setting foreign exchange benchmarks with senior currency dealers at major investment banks in April 2012, more than a year before regulators launched official probes into alleged rate manipulation, according to a Freedom of Information Request made by Reuters.
The investigations into alleged currency market rigging intensified on Wednesday as U.S. regulators descended on Citigroup's London offices and Deutsche Bank suspended several traders in New York.
A Bank of England (BoE) response to the Freedom of Information Request released on Wednesday said: "There was a brief discussion on extra levels of compliance that many bank trading desks were subject to when managing client risks around the main set piece benchmark fixings".
This discussion took place at a meeting on April 23, 2012 of the "chief dealers subgroup" of the London Foreign Exchange Joint Standing Committee, which is run under the auspices of the BoE and involves representatives from the major players in the foreign exchange market.
This was 18 months before Britain's top financial watchdog, the Financial Conduct Authority (FCA), confirmed it was investigating alleged manipulation and the U.S. Department of Justice said it was launching criminal investigations.
Regulators around the world are probing allegations of manipulation in the $5.3 trillion-a-day market, by far the world's biggest and largely unregulated.
The probe into the exchange of positioning and order flow information between senior traders at major banks and allegations of attempted manipulation has resulted in several traders being put on leave, suspended or fired.
Sources told Reuters that traders raised questions about the use of chatrooms by dealers at the meeting in April 2012 because they were concerned about the growing regulatory storm surrounding the London Interbank Offered Rate, known as "Libor", where traders were accused of manipulating global benchmark interest rates. Continued...