Forex manipulation: How it worked
Mark Carney, the Governor of the Bank of England, pledged to appoint a new Deputy Governor at the Bank to lead a “root and branch” review of its strategy, after suspending an official over the foreign exchange market manipulation scandal.
Carney claimed that there was “no evidence” any Bank of England official had condoned manipulation of the foreign exchange market, as he faced down tough questioning from U.K. members of parliament (MPs).
He defended the Bank against MPs’ suggestions it should have been more alert to the possibility of foreign exchange market manipulations, after the matter was raised as part of regular meetings between the Bank and market participants, some of whom have since been arrested over the scandal.
Read Full Report: CNBC.com
Mark Carney’s Deception
Posted Sep 12, 2013
Watch Mark Carney’s failed attempt to deceive the MPs about his policy implementations.
Listen carefully and hear him admit loosening policy and increasing inflation is being implemented.
Mark Carney faces Forex questions from MPs
Posted Mar 11, 2014
The Governor of the Bank of England, Mark Carney, has been questioned by MPs about allegations that officials at the bank turned a blind eye to warnings of price rigging in the foreign exchange market.
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The investigation into alleged manipulation of the foreign exchange market now takes in most of the world’s biggest banks, regulators in three continents, potentially hundreds of traders – and now the U.K’s central bank.
Here’s a look at the key issues involved:
The ‘fix’
Every day, a currency “fix” known as the WMR/Reuters fix, is agreed, based on the price that currency trades at over a 60 second period. At the center of the probe seems to be traders eager to make a quick profit by buying up currencies just before they knew clients were going to buy large amounts of the same currency at the daily “fix”. This way the traders could sell on at a profit when the price rose at the “fix.”
Some also appear to have passed on information to traders at other companies about big upcoming trades. All of this could have artificially raised the value of one currency against another.
Trader tactics
Read more: http://www.cnbc.com/id/101482959
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“ALARM BELLS”
http://uk.reuters.com/article/2014/03/05/uk-britain-boe-fx-idUKBREA240SV20140305
By Jamie McGeever Wed Mar 5, 2014
Bank of England suspends official in FX fixing probe
[…]
The CDSG last met in February 2013, even though a meeting had been scheduled for the following July. Media reports of allegations of FX market manipulation first surfaced in June. A Bank spokesperson was unable to say why the meetings with chief dealers had stopped or at whose behest.
The Bank’s internal review began in October last year and has to date examined around 15,000 emails, 21,000 chat room records and more than 40 hours of telephone call recordings.
Britain’s Financial Conduct Authority and the U.S. Department of Justice also formally opened investigations in October last year. They are among regulators around the world looking into possible wrongdoing in the $5.3 trillion-a-day FX market.
More than 20 traders have been placed on leave, suspended or fired by banks in recent months, including the chief dealers at currency trading giants Citi, JP Morgan Chase, Barclays and UBS.
“Alarm bells should be ringing when a central bank suspends staff in connection with market rigging,” said Simon Morris of law firm CMS. “This is serious, because the whole basis of regulation is based on trust and integrity.”
The global probe centres on allegations a handful of traders exchanged market-sensitive information to manipulate benchmark exchange rates set daily in London, known as the “London fix”.
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Read More: http://uk.reuters.com/article/2014/03/05/uk-britain-boe-fx-idUKBREA240SV20140305
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