SFO investigates BoE's influence on emergency auctions
The Bank of England is reportedly under investigation by the Serious Fraud Office (SFO) over claims the central bank told lenders to bid at a particular rate in emergency auctions to limit questions about their balance sheets.
The SFO is looking into whether the BoE instructed banks and building societies to offer around the same amount of collateral so no lender would be singled out for overbidding, the Financial Times reported late Monday.
The Bank has previously said it referred information relating to the auctions to the SFO. The auctions, which allow lenders to swap a wider range of assets for funding and gain access to emergency liquidity, were introduced in late 2007.
The SFO began the investigation this year on the action which has been described as an attempt by the BoE to avoid more stress on the financial system on the verge of the banking crisis. The SFO is deciding whether to pursue the case, and a decision is expected before the end of the year.
The news follows recent scandals at the BoE over the manipulation of foreign exchange and interbank lender rates in recent years.