Scandal: Bank Of England Encouraged Currency Manipulation By Banks
This article comes from ZeroHedge.com
by Tyler Durden
Raise your hand if you are surprised that, as has emerged, virtually every major bank was manipulating currencies (and everything else) whether as part of the “Bandits’ Club”, the “Cartel” or some other – until recently- secret message room.
That’s what we thought.
Now raise your hand if you thought the manipulation could be so pervasive, so glaring and so in your face, that even the oldest central bank – the Bank of England – and who knows how many other monetary authorities, were openly encouraging traders from these private banks to do more of the illegal activity they had been engaging in – namely manipulating currencies – with their explicit blessing knowing very well such behavior is undisputedly illegal.
We hope at least one or two hands went up, because which it is one thing to be cynical about what is going on behind the scenes, it is something else to see the edifice of global corruption and criminality, whose only purpose was to preserve the status quo, unwinding before your very eyes substantiated by actual facts.
Such as this report by Bloomberg which confirms that yet another conspiracy theory is fact, as at least one central bank has been exposed to not only have known about a criminal activity that is now costing the jobs of hundreds of traders (and should lead to jail time), but to have urged it on.
Bank of England officials told currency traders it wasn’t improper to share impending customer orders with counterparts at other firms, a practice at the heart of a widening probe into alleged market manipulation, according to a person who has seen notes turned over to regulators.
A senior trader gave his notes from a private April 2012 meeting of currency dealers and two central bank staff members to the Financial Conduct Authority about six weeks ago because of mounting media coverage of the investigation, said the person, who asked not to be named while probes are under way.
Traders representing some of the world’s biggest banks told officials at the meeting that they shared information about aggregate orders before currency benchmarks were set, three people with knowledge of the discussion said. The officials said there wasn’t a policy on such communications and that banks should make their own rules, according to the people. The notes could drag the U.K. central bank into another market-rigging scandal two years after it was criticized by lawmakers for failing to act on warnings that Libor was vulnerable to abuse.
If traders can show “they made Bank of England officials aware of practices in the FX market some time ago, then the bank will be at risk of being characterized as having endorsed, by its silence and inaction, the very practices which are now under investigation,” said Simon Hart, a lawyer at RPC LLP in London.
Wait for it, wait for it… Here it comes: “If the BOE did not encourage currency manipulation by bankers, then the world would have crashed” – did we get the excuse that the Bank of England (and soon after, the Fed, the SNB, the BOJ and all other banks as there is never just one cockroach) will use to justify their criminal behavior? Why, of course.