Mark Carney has been forced to admit that allegations of rigging in foreign exchange markets could prove be a bigger scandal than the manipulation of Libor as he sought to rebuff criticism that the Bank of England had been slow to react.
The committee’s Andrea Leadsom repeated several times a question to Paul Fisher, the Bank’s executive director for markets over why Threadneedle Street did not once deign to follow up the committee’s queries in the wake of the Libor scandal over whether other prices may have been rigged.
She quoted from minutes from 2006 meetings between the Bank and its chief dealers subgroup, which noted “evidence of attempts to move the market” at certain times and said that should have set bells ringing. “It goes back to this complacency that all will be fine,” Leadsom said to Fisher.
But Fisher said: “Those minutes did not convey to me that markets were being rigged.”
On the question of being spurred into further investigations, Fisher said: “It isn’t our job to go out hunting for rigging of markets.”
If it isn’t the the Bank of England’s executive director for markets job to go hunting for rigged markets, who, exactly, is responsible? And given such a supine regulatory approach, how can one have faith in any of the global benchmarks for e.g. commodities trading?