Did City crisis cause Bank of England to break the law? Bank could face criminal investigation into how it propped up lenders at start of credit crunch
The Bank of England risks being dragged into a criminal investigation into how it propped up ailing lenders during the financial crisis, it emerged last night.
The central bank supplied high street lenders with emergency funds in 2007 and 2008 through so-called money-market auctions to stop the banking system freezing up as the credit crunch intensified.
But it last year instructed a leading barrister to look into whether any of its staff knew of, or even participated, in attempts to rig the auctions.
The Bank of England (pictured) risks being dragged
into a criminal investigation into how it propped up ailing lenders during the financial crisis
The Bank has since passed on the results of the inquiry by Lord Grabiner QC to the Serious Fraud Office which is now examining the findings.
The SFO said it was ‘investigating material referred to it by the Bank of England concerning liquidity auctions during the financial crisis in 2007 and 2008’.
It is thought that the probe could lead to a full-blown criminal inquiry – although it is unclear whether such an investigation would focus on Bank officials or traders outside the central bank.Source: www.dailymail.co.uk