Bank of England 'Probes Money-Market Rigging'

The Bank of England has opened a formal investigation into the possible manipulation of money-market auctions held at the start of the financial crisis and whether its officials were involved, the Financial Times reported on Saturday.

The months-old probe is being conducted by the lawyer who led the Bank's investigation into the rigging of forex markets, Anthony Grabiner, and he has so far interviewed about ten Bank staff, the business daily said.

The Bank said it would not provide a "running commentary" into any investigations but confirmed no action had been taken or was being considered against any of its employees.

"If the bank were conducting an investigation or review of any of its activities, as it does from time to time, it would be wholly inappropriate to provide a running commentary via the press," a spokesman told Agence France Presse. 

"I can tell you that no actions have been taken or are currently being contemplated against any employee of the Bank."

When the financial crisis hit in 2007 and 2008, concerns that major banks could not fund their debts damaged confidence in the interbank lending system, where commercial banks lend to each other.

Banks were left struggling to obtain the money required to meet their day-to-day operating needs.

So the Bank intervened, auctioning off billions of pounds (euros, dollars) of what were effectively short-term loans at low interest rates.