Bank of England launches probe on officials condoning currency manipulation

According to a report by Bloomberg, Bank of England recently started a review into claims that officials allowed the practices that resulted to the manipulation of currencies in markets.

Bank of England's Prudential Regulation Authority Chief Executive Officer Andrew Bailey told lawmakers in the UK today that the central bank of London has alredy tapped lawyers to determine whether officials at an April 2012 meeting said to traders that sharing of impending customer orders via chat rooms was not improper.

Last week, Bloomberg said in its report that senior currency dealers at banks that include Citigroup Inc and UBS AG shared to central bank officials at the 2012 meeting that they share and talk about their positions prior to key benchmarks and matched sellers and buyers ahead of the fix in order to prevent trading. Three people who had knowledge about the April 2012 meeting said that central bank representatives responded that the practices were actually a positive strategy to reduce volatility in the market and that the banks should create their own policies.

Bailey refuted the allegations and told members of parliament at a Treasury Select Committee hearing, "The governors of the bank have taken claims of the meeting with officials very seriously. The Bank of England does not condone any form of market manipulation."

Lawmakers in the UK had been clamoring for their government to launch an inquiry into the Bank of England's knowledge about the trader practices in the $5.3 trillion-a-day currency market.

Labour party lawmaker and member of the Treasury committee John Mann said in a Bloomberg Television interview, "It seems to me that us in parliament have not been told the whole truth. We keep asking questions of who knew what and what was done about it and getting bland denials that anyone knew anything. I think we're going to have some pretty fiery sessions later on."

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Bank of England, Prudential Regulation Authority Chief Executive Officer Andrew Bailey, Prudential Regulation Authority

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