Allegations by some media that the BoE knew about FX fix manipulation practices are groundless
This has to be one of the weirdest twists in FX trading history – first of all we are getting a report by Bloomberg that officials at a major central bank, namely the Bank of England have been talking to senior currency dealers. What did they talk about? Well according to the report in question which Bloomberg has brought up last week BoE officials said that sharing information with other dealers about the order flow was not inappropriate.
Information stemmed from a senior dealer that gave his notes from a meeting with two central bank staff members to the FCA several weeks ago. According to the discussion traders did tell to the BoE officials about their routine practices of sharing order information. Allegedly the response from the central bank representatives was that banks should be making their own rules in relation to such communication and it wasn’t of the Bank of England’s concern.
So here we are back to the issue – the central bank has stated that there was no evidence of the mentioned media allegations to be true. Does that mean that it didn’t happen? It’s as if humans invented language in order to be vague. The minutes of the meeting have been released, however there are allegations that there are different versions of what has actually happened according to the Bank’s deputy governor Andrew Bailey, cited by Reuters.
As the public keeps scratching their heads as to what has happened to the evidence that was already presented to the FCA and will we ever see the full text of that, the Bank of England’s credibility will keep suffering. Its as if LIBOR was not enough of a blow to the system, the forex manipulation story is far from over.