A Bloomberg article about how a senior trader has given his notes of private April 2012 meeting of currency dealers with two central bank staff members to the Financial Conduct Authority. Says:
- Bank of England officials told currency traders it wasn’t improper to share impending customer orders with counterparts at other firms
- Traders representing some of the world’s biggest banks told officials at the meeting that they shared information about aggregate orders before currency benchmarks were set, three people with knowledge of the discussion said.
- No firms or traders have been accused of wrongdoing by government authorities
During a 15-minute conversation on currency benchmarks, traders said they used chat rooms to match buyers and sellers ahead of the fix to avoid trading at one of the most volatile periods of the day, the people said. That required them to share aggregate positions. They instigated the discussion because they were concerned that similar practices were under scrutiny at the time in the Libor investigations, the people said.
The Bank of England officials said they viewed the practices as positive to reduce market volatility and wouldn’t take the matter to the standing committee, according to the people with knowledge of the meeting. That body included a representative from the Financial Services Authority, the FCA’s predecessor, according to central bank records.
More at Bloomberg: BOE Staff Said to Have Condoned Currency Traders’ Conduct
h/t and thanks to Clinton Dawkins in the comments to Mike’s earlier post here: It’s a fine line between forex flow and forex fix