The Bank of England’s governor has promised to "root out corruption" in the City and "make the financial system safe".
Speaking on Channel 4 News, Mark Carney said that his role was not to be a "cheerleader" for the banks, adding that the job of the UK central bank was to "change the structure on the markets" in the wake of a global investigation into alleged fixing of foreign currency rates.
"We're not cheerleaders for the City. Our job is to make the City safe effectively, make the financial system safe,” said Carney, “And then it will find its own size.”
He added: "We have to change the structure of these markets and we're working on that, and we have to root out corruption in these markets where it's found."
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Lloyds Banking Group has launched an internal review of its foreign exchange trading operations after a number of its rivals were drawn into a worldwide probe into alleged rate-rigging. The bank, which is 33% owned by the taxpayer, is not itself subject to a formal investigation but has been asked by the Financial Conduct Authority (FCA) to review its operations and report irregularities.
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HSBC disclosed that it was co-operating with the FCA in its foreign exchange trading investigation. Royal Bank of Scotland and Barclays have also been drawn into the probe, with traders reportedly suspended. Carney said he was "very concerned" about the allegations of rate-rigging, which follow a series of scandals to hit the City including Libor rate-rigging, PPI loan insurance mis-selling and interest rate swaps.
"We are very concerned about the allegations in the FX (foreign exchange) market," he told Channel 4 News. "We are supporting the authorities, the FCA and others in their investigations... it's not our primary responsibility but we'll do everything we can to root this out."