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11 Mar 2014
BoE's Carney on Scottish independence and the currency manipulation scandal
FXStreet (Łódź) - After a short break in the testimony before UK parliament's Treasury Select Committee, Mark Carney returns accompanied only by MPC member Paul Fisher to answer questions on Scottish independence and the issue of allegations of the central bank's involvement in currency market manipulations over a number of years.
No FPC research yet on possible impact of Scotland becoming independent
As far as Scottish independence is concerned, Carney suggests that the BoE would get involved only in case of it threatening the stability of the monetary framework. When asked if
the Financial Policy Committee had done any research on the possible risks connected with Scotland becoming independent, Carney answers negatively, stressing that there are other priorities.
He also says that there is a possiblity that the Royal Bank of Scotland would have to move its headquarters to England is Scotland became independent and became a member of the European Union.
Getting to the bottom the FX price fixing issue of utmost importance for the BoE
The MP's then pass on to questions about the currency-manipulation scandal, which came into focus after the BoE suspended an employee following an internal investigation and released meeting minutes which revealed that policymakers were conscious of the possibility of currency traders colluding to manipulate key exchange rates.
The BoE governor assured that the central bank “acted swiftly” upon becoming aware of the case on October 16 and immediately hired a legal council. He adds that the BoE had “relentlessly followed up on allegations of FX price fixing”, suggesting however that an external person should be appointed to deal with the inquiry.
Still Paul Fisher denies that the BoE had been aware since 2006 that exchange rates could have been manipulated, stressing that they had realized it only klast year.
“It would be very odd for traders to have come to these meetings and said ‘we’ve been rigging the market, what do you think?’,” he says.
Carney assures that resolving the problem of exchange rate manipulation is of crucial importance, as BoE's credibility depends on it.
No FPC research yet on possible impact of Scotland becoming independent
As far as Scottish independence is concerned, Carney suggests that the BoE would get involved only in case of it threatening the stability of the monetary framework. When asked if
the Financial Policy Committee had done any research on the possible risks connected with Scotland becoming independent, Carney answers negatively, stressing that there are other priorities.
He also says that there is a possiblity that the Royal Bank of Scotland would have to move its headquarters to England is Scotland became independent and became a member of the European Union.
Getting to the bottom the FX price fixing issue of utmost importance for the BoE
The MP's then pass on to questions about the currency-manipulation scandal, which came into focus after the BoE suspended an employee following an internal investigation and released meeting minutes which revealed that policymakers were conscious of the possibility of currency traders colluding to manipulate key exchange rates.
The BoE governor assured that the central bank “acted swiftly” upon becoming aware of the case on October 16 and immediately hired a legal council. He adds that the BoE had “relentlessly followed up on allegations of FX price fixing”, suggesting however that an external person should be appointed to deal with the inquiry.
Still Paul Fisher denies that the BoE had been aware since 2006 that exchange rates could have been manipulated, stressing that they had realized it only klast year.
“It would be very odd for traders to have come to these meetings and said ‘we’ve been rigging the market, what do you think?’,” he says.
Carney assures that resolving the problem of exchange rate manipulation is of crucial importance, as BoE's credibility depends on it.