Bank of England (BoE) is the subject of an unprecedented criminal investigation over suspected fraud in its money market auctions during the financial crisis.
Investigators in Britain’s Serious Fraud Office (SFO) are probing the results of an independent inquiry that have been referred to it, the Financial Times reported Thursday.
The British central bank’s oversight committee instructed Lord Grabiner last year to investigate whether any bank official was involved in attempts to rig auctions as the financial crisis began to bite in late 2007 and 2008.
It is the first time the bank has been caught up in a criminal inquiry in the law agency’s 28-year history.
BoE is facing intensified scrutiny over its governance, particularly over the rigor of an earlier investigation into its involvement in a foreign exchange rigging scandal.
Governor Mark Carney this week told legislators that in the aftermath of that forex inquiry, the BoE had found 50 instances of potential market abuse that in the past it might have missed.
It is unclear whether the fresh SFO probe focuses on the behavior of external traders or BoE officials, or both.
During the central bank’s internal investigation into the auctions, Lord Grabiner interviewed about 10 staff, who were provided with defense lawyers at the expense of the bank, people familiar with the investigation told the FT last year.
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