BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Banks, Financial

BoE admits it was subject of police probe

Posted on July 31, 2015

File photo dated 30/07/14 of the Bank of England as interest rates are expected to remain on hold today when the Bank of England delivers its latest policy decision, a day after Chancellor George Osborne's emergency summer Budget. PRESS ASSOCIATION Photo. Issue date: Thursday July 9, 2015. Rates have remained unchanged at 0.5% for more than six years and are not expected to rise until next year. The Bank's Monetary Policy Committee (MPC) is likely to weigh up developments such as accelerating wage growth and upward revisions to the UK's economic performance against fears over Greece and disappointing manufacturing figures. Howard Archer, chief UK and European economist at IHS Global Insight, said it was "once again certain to keep interest rates on hold at 0.5%". "Even if the Bank of England was close to an imminent interest rate hike (which we doubt it is), it would be highly unlikely to act the day after the budget," he said. See PA story ECONOMY Rates. Photo credit should read: Anthony Devlin/PA Wire©PA

The Bank of England has been forced to admit that a police investigation in the 1990s suspected that monetary policy decisions were being leaked to a businessman with links to organised crime.

A wife of a BoE official was suspected by police in the late 1990s of leaking information to her lover, a businessman who in turn was suspected of being the “front” for a north London organised crime family, it was alleged in a report by news website BuzzFeed on Thursday night.

    The report, which claimed MI5, the domestic intelligence service, was also involved in the investigation, identified the man only as The Suit and his alleged lover was not named.

    The BoE conceded on Friday that police had launched a probe at the time, contacting the central bank in 1998.

    “The Bank of England was approached regarding a potential issue by the police at the time,” it said. “The Bank followed up and nothing was found to substantiate the claims of a leak.”

    No one was fired or disciplined as a result of the investigation.

    The Metropolitan Police declined to comment on the allegations, pointing to ongoing legal matters in connection to some parts of the article.

    Lawyers for the businessman at the centre of the probe said their client denies ever laundering money or being a front for organised criminals; and denies receiving or acting on any inside information. He also denies any sexual relationship with the official’s wife, BuzzFeed added.

    Leaks of monetary policy would be illegal. Officials on the Monetary Policy Committee, which controls interest rate moves, must sign a “declaration of secrecy” and enter into strict periods of purdah between their committee deliberations and announcements of their decision. The BoE, as well as financial regulators, also monitor any suspicious market moves ahead of the publication of interest rate decisions.

    The explosive claims over leaks come at a particularly sensitive time for the BoE, which faces an unprecedented criminal probe by the Serious Fraud Office into whether any of the central bank’s officials knew of or participated in alleged rigging of money market auctions held at the onset of the financial crisis.

    MPs to scrutinise new MPC member over Brevan Howard earnings

    Gertjan Vlieghe of the BoE MPC

    A powerful parliamentary committee is set to scrutinise whether the business interests of the incoming member of the Bank of England’s Monetary Policy Committee may clash with his new role.

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    This investigation came swiftly after an embarrassing cameo role in the foreign-exchange rigging scandal. An internal probe by Lord Grabiner QC cleared BoE officials of wrongdoing but criticised an official, Martin Mallett — who was fired over unrelated matters — for not escalating concerns.

    The BoE is not the only central bank to come under scrutiny for potential leaks: the US Federal Reserve is also facing allegations of a leak in 2012. The European Central Bank official came under fire earlier this summer for making remarks over allegedly privileged information at an event hosted by Brevan Howard, the hedge fund. The ECB denies the information was privileged.

    A former Brevan economist, Gertjan Vlieghe, has just been appointed to the BoE’s MPC. The Treasury select committee said on Thursday it would scrutinise the decision that Mr Vleighe will still be able to retain his stake in Brevan, a macro fund whose trading strategy is based on anticipating shifts in economic and monetary policy.

    But the BoE said: “The Bank of England has a code of conduct in place that applies to all MPC members and this ensures that no conflicts of interest exist when members join the committee. This code is applied rigorously at all times.”