UK lawmaker calls for new report on BoE handling of FX scandal

(Reuters) - A British lawmaker has called for a new look into the Bank of England's role in a foreign exchange scandal, saying the original investigation it commissioned was too narrow in focus. Jesse Norman, a Conservative member of parliament, said the 2014 investigation should have focused on what BoE officials ought to have known about the market-rigging scandal in foreign exchange markets, rather than what they actually knew and did about it. The 2014 report was written by Anthony Grabiner, a leading London lawyer. He found that the bank's chief foreign exchange dealer had failed to share his concerns about possible wrongdoing in the markets with his managers. The dealer was dismissed by the bank for what it said were unrelated reasons. Four major banks pleaded guilty last week to trying to manipulate foreign exchange rates and, with two others, were fined nearly $6 billion in another settlement in a global probe into the $5 trillion-a-day market. Norman has previously criticized Grabiner's report as inadequate in scope and he was involved in angry exchanges with the lawyer in a hearing of parliament's Treasury Committee of which Norman was a member. "The Grabiner report is manifestly inadequate," Norman wrote as he renewed his criticism with an opinion piece in the Financial Times published on the newspaper's website on Monday. "It does not resolve the question of whether BoE officials, including senior staff, were negligent or otherwise at fault. It leaves a shadow of doubt over an institution that aspires to be above suspicion." Norman called on the bank's oversight committee to scrutinize the case independently of BoE Governor Mark Carney and said the Treasury Committee in parliament should draw up its own report. He said he had been given advice from a London law firm which, he said, showed that the Grabiner report had failed to match the higher standard of inquiry adopted in other high-profile cases. The BoE denied the allegation. "The bank categorically rejects the assertion that it set the terms of the Grabiner inquiry too narrowly," it said in a statement, adding that the chairman of the central bank's oversight committee had expressed the same view. (Reporting by Ankush Sharma in Bengaluru, edited by William Schomberg and G Crosse)