Bank of England Considers a Shake-Up of Foreign Exchange Committee

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Bank of England Considers a Shake-Up of Foreign Exchange CommitteeThe Bank of England is mulling whether to shake up the foreign-exchange committee that it maintains for traders and traders at a time when global probe is ongoing over possible foreign exchange manipulation in the currency markets.

The committee, which is known as London Foreign Exchange Joint Standing Committee, was established in 1973 and convenes every two months. It is mainly composed of senior staff from the main currency-dealing lenders, and representatives from industry associations and BOE.

In recent months, many members of the committee’s subgroup, called Chief Dealers’ Subgroup, have either been dismissed or suspended as the global probe into potential benchmark fixing deepens.

A source privy to the matter told Wall Street Journal that the Bank of England is weighing whether to change the composition of the FXJSC to incorporate more members from asset management sector, which is a major client of banks’ foreign exchange services.

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When contacted, a spokesperson for the Bank of England refused to give any comment on whether any changes were being considered.

“The FXJSC periodically reviews its membership,” he said.

Market regulators in U.S., U.K. and Switzerland, as well as Australia and Hong Kong, are currently investigation whether dealers in top banks colluded to fix the benchmark rates of the $5.3 trillion-a-day market, or took part in any unethical practices. So far, at least 20 dealers have been fired or suspended; with most of them in New York or London.

One suspended dealer passed over handwritten notes dated from an April 2012 confidential meeting in a bank to the U.K. Financial Conduct Authority that show that central bank was informed that the culture of aggregating and sharing client orders was extensive.

Last month, BOE suspended a staff member as the investigation into the currency-fixing continues.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com