Serious Fraud Office launches investigation into Bank of England liquidity auctions

The Bank of England is facing an unprecedented criminal investigation by the Serious Fraud Office over emergency lending measures it took at the height of the credit crisis to inject cash into financial markets.

In late 2007 and early 2008, as the authorities struggled to prevent financial markets from freezing up, banks were invited to bid to borrow funds from the Bank of England, in exchange for collateral, in a series of so-called “auctions”.

It is the conduct of these liquidity auctions which is now being investigated by the SFO, which said in a statement it is, “investigating material referred to it by the Bank of England concerning liquidity auctions during the financial crisis in 2007 and 2008”.

Source: HITC

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