SFO Launches Investigation Into Crash Cash

The Serious Fraud Office is investigating material from the Bank of England over cash injections into the money market during the height of the financial crisis.

In 2014, the bank launched its own inquiry into procedures of liquidity-boosting to stabilise the system.

That inquiry was conducted by Lord Grabiner and its findings were referred to the Serious Fraud Office (SFO) on 20 November.

The liquidity auctions were held in 2007 and 2008 to bolster the system, following the collapse of Northern Rock.

The Bank of England (BoE) confirmed the investigation but declined to elaborate.

"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 BoE said in a statement.

The SFO said it was "investigating material referred to it by the Bank of England concerning liquidity auctions" during those years.

In November, the Financial Times reported that the internal probe was examining if BoE staff were aware of or participated in manipulation of the auctions by staff at some commercial banks.

The SFO's duties involve investigation of complex fraud and corruption allegations within Britain.

The chairman of Parliament's Treasury Select Committee (TSC), Andrew Tyrie MP, urged both speed and transparency in the SFO investigation.

"The bank referred this to the Serious Fraud Office when Lord Grabiner's initial findings were made clear to them - this was the right thing to do," Mr Tyrie said.

"We must now await the outcome of the SFO’s work. The sooner their findings are published the better."

An earlier and unconnected inquiry by Lord Grabiner involved the BoE in relation to foreign exchange manipulation.

He did not find evidence of any misconduct by bank staff.

BoE governor Mark Carney was asked by MPs earlier this week about the liquidity auction investigation but he declined to comment.

:: At midday on Thursday the BoE announced the historic low base rate of - in force for 72 months - would remain at 0.5%.