Britain's fraud squad probes Bank of England

bank of england carney
Bank of England governor Mark Carney told U.K. lawmakers he is cracking down on potential market abuses.

Britain's top fraud busters are investigating the Bank of England over potential wrongdoing stretching back to the financial crisis.

The Serious Fraud Office is examining auctions conducted by the central bank in 2007 and 2008. They were designed to help keep money flowing through the banking system at the start of the financial crisis.

The Bank of England commissioned an independent inquiry into the money market auctions last year. Once that inquiry was completed, it referred the matter to the SFO -- which prosecutes cases of complex fraud -- in November 2014.

"Given the SFO investigation is ongoing, it is not appropriate for the bank to provide any additional comment on the matter at this time," it said in a statement.

Related: Forex fraud: Now it's getting serious

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British banking is still struggling to wipe clean the stain of misconduct that has tarnished the industry since the meltdown in 2008.

The latest probe follows an investigation by the SFO into potential rigging by traders of the $5.3 trillion-a-day foreign exchange market.

An official at the Bank of England was initially embroiled in that probe, but an independent inquiry later cleared him of any wrongdoing. Six banks have already paid $4.33 billion to settle claims they rigged currency markets.

In the aftermath of the foreign exchange scandal, the central bank moved to clean up its operations and promote more transparency.

Governor Mark Carney told U.K. lawmakers Tuesday that it had identified 50 cases of potential market abuse.

Of those, he said 42 cases had been referred to the Financial Conduct Authority, and that the financial watchdog was investigating a number of those.

When asked about the high number of potential abuses, Carney told lawmakers he was "pleased that the process appears to working." The bank has instituted new policies, rules for keeping records, and training to improve processes and operations.

"I'd be disappointed if the run rate of what is escalated continues at that high level," he added.

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