Yet another banking scandal emerged last night. But this time it surrounds not a big City firm, but the central bank itself. The Bank of England (BoE) confirmed it was under criminal investigation by the Serious Fraud Office (SFO) over its liquidity auctions during the financial crisis.
Liquidity auctions allow banks to gain access to cash from the central bank for lending. A series of them was held in the immediate aftermath of the financial crisis in an effort to maintain stability, but it seems that there are concerns about attempts to rig them.
It's unclear whether the allegations are aimed at the BoE's own officials or the individual bidders involved in the process. The BoE confirmed last night that it asked Lord Grabiner QC to conduct an enquiry into the matter last year.
'Following the conclusion of that initial inquiry, the BoE referred the matter to the SFO on 20 November 2014,' it said in a statement. 'Given the SFO investigation is ongoing, it is not appropriate for the Bank to provide any additional comment on the matter at this time.'
The SFO has a habit of not acting unless it's fairly certain of wrongdoing, so things are looking serious This is the first time it's ever investigated the BoE since launching 28 years ago, but it's not the first time City figures have been accused of taking advantage of the bank's measures to tackle the financial crisis. Nor is it likely to be the last.