Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • Nikkei

    40,369.44
    +201.37 (+0.50%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Bitcoin USD

    69,795.95
    -594.03 (-0.84%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • FTSE Bursa Malaysia

    1,536.91
    +6.31 (+0.41%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Bank of England fires chief FX dealer

A taxi stops in front of the columns of the Bank of England in the city of London, October 17, 2014. REUTERS/Andrew Winning

By Jamie McGeever and William Schomberg

LONDON (Reuters) - The Bank of England has fired its chief foreign exchange dealer after an investigation criticised his handling of suspicious market practices, the BoE said on Wednesday.

The review commissioned by the oversight committee and chaired by Lord Grabiner detailed communications, including emails and telephone call transcripts, between Martin Mallett and FX market participants going as far back as 2006.

In them, Mallett expressed concern that communications between traders could be seen as collusion and possible market manipulation.

In one call on October 3, 2011, Mallett and a trader at a bank discussed the activities of brokers and banks around the so-called "London fixing", the one-minute window when global benchmark exchange rates are set.

ADVERTISEMENT

Trader: … It's being, it's being exaggerated shall we put...

Mallett: Well that's market manipulation isn't it?

Trader: Yep absolutely.

And in a call On November 28, 2012, Mallett told a market commentator he felt the FX market was "too chatty" and there was a "fine line" between that and collusive behaviour.

"I'm a little bit nervous about the FX market's approach to benchmarking, fixing, because of its inherent chattiness and like I say, there's a fine line between chattiness and, and acting in a way which disadvantages others," he said.

Despite being uncomfortable with the practice, Mallett did not escalate the matter, which "constituted an error in judgment that deserved criticism, but such criticism should be limited in that the individual was not acting in bad faith", Grabiner's report said. The report said Mallett was not aware of any specific instances of unlawful or improper behaviour.

Attempts to reach Mallett for comment were unsuccessful.

The BoE said his dismissal on Tuesday was "unrelated" to the scandal in which five banks have been fined $3.4 billion for failing to stop their traders from trying to manipulate foreign exchange markets. [ID:nL6N0T21PY]

In his report, Grabiner said there was no evidence any Bank official had been involved in unlawful or improper behaviour in relation to the FX investigation, and that none knew of improper behaviour by traders at banks based on shared confidential information, including aggregated information about client orders.

Grabiner's report said Mallett was aware that traders were sharing information, which was not necessarily improper but could increase the potential for improper conduct.

CHIEF DEALERS' MEETINGS SCRAPPED

Mallett, who joined the BoE in September 1986, was suspended in March as the Bank looked into what officials might have known about alleged manipulation of key currency rates by traders.

The BoE also said on Wednesday it had scrapped the formal meetings with London-based chief currency dealers that had been held regularly until last year, just before the global investigation got under way.

The meetings, which were chaired by Mallett, have been "disbanded" and there will be "no more", a BoE spokesperson told Reuters.

The Foreign Exchange Joint Standing Committee's chief dealers' subgroup (CDSG), held under the auspices of the BoE to discuss industry issues, met up to four times a year.

Its first meeting was in 2005, and the last at the BoE's offices in Threadneedle Street, London, in February last year.

Separately, British finance minister George Osborne said Britain was taking "tough action to clean up corruption by a few so that we have a financial system that works for everyone".

The country's regulatory response to the financial crisis meant "the world can have confidence in the integrity of Britain's financial markets".

(Story refiled to correct quote attribution in 8th paragraph to Lord Grabiner's report, not the Bank of England)

(Reporting by Jamie McGeever and William Schomberg; Editing by Andrew Roche)