BoE signs up to code for keep­ing forex mar­kets clean

The Pak Banker - - FRONT PAGE - -REUTERS

LON­DON: The Bank of Eng­land has signed up to a new global code of con­duct de­signed to avoid more cur­rency ma­nip­u­la­tion scan­dals, put­ting pres­sure on UK banks to fol­low suit. Af­ter banks were fined bil­lions of dol­lars for try­ing to rig cur­rency bench­marks, cen­tral banks across the world spon­sored a new, vol­un­tary FX mar­ket code pub­lished last year, which banks and deal­ers are also be­ing urged to adopt.

Lon­don ac­counts for 37 per­cent of the world's $5 tril­lion a day global for­eign ex­change mar­ket and the BoE pub­lished on Tues­day a signed "state­ment of com­mit­ment" to ap­ply the code in all its ac­tiv­i­ties in cur­rency mar­kets.

"Fair, trans­par­ent and ro­bust mar­kets, un­der­pinned by high stan­dards, ben­e­fit all par­tic­i­pants," Dave Rams­den, BoE deputy gover­nor for mar­kets and bank­ing, said in a state­ment.

In 2014 the BoE fired its chief dealer Martin Mal­lett, and called for an in­de­pen­dent in­ves­ti­ga­tion into what the Bank knew of al­leged cur­rency mar­ket col­lu­sion and ma­nip­u­la­tion.

The in­ves­ti­ga­tion found at least 20 "ex­am­ples of mis­judge­ments" by Mal­lett, in­clud­ing vi­o­la­tions of the Bank's in­for­ma­tion tech­nol­ogy and con­fi­den­tial­ity poli­cies.

The Czech Na­tional Bank, Bank of Spain, Cen­tral Bank of Cyprus, Na­tional Bank of Aus­tria, Na­tional Bank of Poland and the Na­tional Bank of Ro­ma­nia also an­nounced for­mal ad­her­ence to the FX code on Tues­day.

All cen­tral banks in the Euro­pean Union will have for­mally backed the FX code by May.

The BoE also an­nounced it has signed up to two other codes of con­duct, the first on stan­dards ex­pected from par­tic­i­pants in the de­posit, repo and se­cu­ri­ties lend­ing mar­kets, the sec­ond on con­duct in pre­cious met­als mar­kets.

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