BoE Held Libor Talks A Year Before the Scandal

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 shown to Reuters by the bank.

The document, supplied in response to a freedom of information request for details of a meeting on 23 April 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 Bank about online chatroom use prior to the rate-setting. It was not clear how much detail was provided.

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 Bank should have referred the matter 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 US department of justice also launched an investigations into the largely unregulated $5.3tn-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.

via The Guardian

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