LONDON – The Bank of England is taking the allegations that it indirectly condoned foreign exchange market manipulation “very seriously” and is working with lawyers to investigate the claims, Andrew Bailey, a central bank executive, said Tuesday.
The allegations emerged last week when Bloomberg News, citing an unnamed source, reported that Bank of England officials told currency traders at a meeting in 2012 that it was not improper to share impending customer orders with counterparts at other firms. Sharing such information is now under investigation in an inquiry into whether traders manipulated the foreign exchange market.
When he was pressed about the issue at the hearing, which was scheduled before the allegations emerged, Mr. Bailey said the central bank was examining the issue.
Mr. Bailey, chief executive of the central bank’s Prudential Regulation Authority, said the Bank of England did not condone market manipulation “in any form whatsoever.” He also said that the central bank had no evidence to support the allegations.
Britain’s central bank is under threat of being dragged into a widening investigation into the $5-trillion-a-day foreign exchange market that has led to some top executives at global financial institutions to be fired or suspended. New York State’s top financial regulator, Benjamin M. Lawsky, last week became the latest regulator to start an inquiry into whether banks manipulated the price of foreign currencies.