UPDATE 1-Bank of England discussed currency rate-setting 18 months before probe
By Jamie McGeever
LONDON Jan 16 (Reuters) - The Bank of England discussed with top London currency dealers their process for setting foreign exchange rates more than a year before a global investigation into alleged manipulation, according to a document provided to Reuters by the bank.
The document, supplied in response to a freedom of information request for details of a meeting on April 23, 2012 of the chief dealers subgroup of the London Foreign Exchange Joint Standing Committee, said there was a brief discussion of "processes around fixes" - referring to the daily setting of benchmark exchange rates - and "extra levels of compliance".
Two sources with knowledge of the meeting said the traders told the BoE about online chatroom use in the run-up to the daily rate-setting. It was not clear how much detail of this the traders provided at the meeting.
The subgroup, set up for banks and brokers to discuss broad currency market issues, met at the London offices of French bank BNP Paribas.
The time lag between the start of the global probe and the BoE's meeting, at which sources told Reuters traders had disclosed they were exchanging information via chatrooms about client positions, raises questions about whether the central bank should have referred this to the regulators.
Britain's market watchdog, the Financial Conduct Authority, began enquiries in the first quarter of 2013, but did not formally open an investigation until October when the U.S. Department of Justice also launched an investigations into the largely unregulated $5.3 trillion-a-day market in October 2013.
A source close to the UK probe said the FCA only became aware of issues raised at the BoE's April 2012 meeting several months later. Continued...