LONDON, March 5 (Reuters) - Following are key extracts from minutes of meetings between Bank of England officials and senior foreign exchange dealers in London between 2005 and 2013 showing a record of discussions going back to 2006 about possible manipulation of world currency rates around benchmark fixings.
The release of the documents comes four months after Britain’s Financial Conduct Authority and the U.S. Department of Justice opened investigations into the alleged manipulation and collusion in global currency markets as part of an international probe that has already led to several senior dealers being fired or suspended.
The minutes were released on Wednesday following a Freedom of Information request from Reuters last month. They were published alongside a statement from the BoE which said it had suspended an unnamed official as part of an internal investigation into what the bank knew about the allegations before regulators stepped in last year. -------------------------------------------------------------
FOREIGN EXCHANGE JOINT STANDING COMMITTEE - CHIEF DEALERS SUB GROUP
- “SHORT MINUTES OF THE 10 APRIL 2006 MEETING AT GAUCHO GRILL, EC2”
“It was noted that there was evidence of attempts to move the market around popular fixing times by players that had no particular interest in that fix. This was not in the interest of customers if the market was forced away from where it should be when the fixing snapshot was taken. It was noted that ‘fixing business’ generally was becoming increasingly fraught due to this behaviour.”
- “MINUTES OF THE 12TH MEETING - 16 MAY 2008; CITI, FURNITURE MAKERS HALL, LONDON EC2N”
”There was considerable discussion on this topic with the large majority of members expressing concern about the lack of transparency among some methodologies and the impacts in managing order flow and pricing liquidity at times of concentrated benchmarked interest such as the 4pm London fix.
The chair proposed inviting a representative from a major fixing company to present to the group and hear member’s views at the July meeting.”
- “DRAFT MINUTES OF THE 13th MEETING - 4 JULY 2008; HSBC, 8 CANADA SQUARE, LONDON E14”
”Mr (Brian) Dawson (of WM Company) gave a brief overview of the WM/Reuters venture which produces exchange rate fixings. WM/Reuters currently produce intraday (every hour) and closing spot and forward rates and are working towards providing 24h spot and forward rates as well as NDF rates.
The minutes then detail the presentation into the mechanics of the fix for spot and forward currency rates.
”It was noted that WM/Reuters do not use traded volumes data in the calculation of the spot rates. While they have access to Reuters volume data, the same is not the case for EBS data. The Chief Dealer group agreed that actual traded volumes is a key consideration in the calculation of accurate fixings and suggested that this would be a useful next step in the development of WM/Reuters’ model. Furthermore it was suggested that using a snapshot of the market may be problematic, as it could be subject to manipulation. Perhaps WM could use a window of observations, and determine at what point to fix using volume data.
“The Chair thanked Mr Dawson for his insightful presentation on WM/Reuters’ fixing model and noted that the Chief Dealers group would be happy to communicate further with WM Company and provide suggestions on how to further enhance their model. He invited WM Company to attend a future Chief Dealers meeting for a follow-up session.”
“There was a brief discussion on extra levels of compliance that many bank trading desks were subject to when managing client risks around the main set piece benchmark fixings”.