Carney: Forex ‘fixing’ probe will be ‘ruthless’

Mark Carney pledged to MPs yesterday that the Bank of England would “ruthlessly” inquire into what his officials knew about alleged rigging of currency rates by forex traders.

Bank of England governor Mark Carney. Picture: TSPL

His remarks follow the suspension earlier this month of an unidentified central bank employee.

The Bank has said that so far an independent inquiry has found no evidence that its staff colluded, participated or condoned unacceptable activity.

But governor Carney told a meeting of the Treasury select committee yesterday “that’s a pretty low bar”, and he wanted rigorously honest policies and working culture at the BoE “not some of the time, but all of the time”.

Carney said: “We will ruthlessly, relentlessly follow through the investigation of what happened.” Citing the damage issues like Libor-fixing and forex manipulation had done to the financial markets, he said it was “symptomatic” of individuals “who had lost sight of what a real market is, and that’s unacceptable”.

The governor said his comments were not to pre-judge any inquiry into the suspended individual. “Suspension is not a disciplinary action. It is an action taken to further the investigation,” Carney added.

He said he and the Bank’s other executive directors learnt of the forex-fixing allegations on 16 October, and within 48 hours passed the matter on to the non-executive oversight committee of the Bank. That committee has hired independent counsel to conduct a full investigation.

It is believed that the inquiry will focus on whether Bank officials were aware of the alleged rigging of currency rates, even if they did not collude in such manipulation or share confidential client information.

It will also look at internal controls at the Bank, the governor said, and “escalation” of suspicions at an early stage.

Carney told the committee the central bank needed to have the highest standards of integrity, find out what failings, if any, occurred and make sure they did not happen again.

He said he did not believe the final report would relate just to any one individual. “It’s imperative that we look at all aspects of this situation, and we reconfirm the integrity, probity, prudence and dedication of ongoing employees of the Bank of England,” Carney said.