View more on these topics

FCA probes potential QE manipulation


The Financial Conduct Authority is investigating whether traders attempted to push up the price of gilts before trying to sell them to the Bank of England in 2011.

Bank of England executive director for markets Paul Fisher told MPs yesterday that the second round of quantitative easing could have been “manipulated” by gilt edged market makers in October 2011.

Details of the potential case of market manipulation have been passed on to the FCA. The incident relates to a reverse auction – where market-makers sell gilts rather than purchase them – when a sharp rise in the price of a 2017-dated gilt led to the Bank refusing to buy that bond.

Fisher told the Treasury select committee: “It was very obvious to us what was happening because one gilt was moving in the opposite direction to other gilts in the market, so there was a clear signal.

“We’ve never seen anything like that previously and we’ve never seen anything like that again.”

Asked if manipulation had definitely taken place, Fisher added: “There was that risk. I did not have the information to conclude that.”

The FCA says it does not comment on any ongoing investigation.

There are 21 banks that act as primary dealers in the UK government bond market, including some of the world’s biggest financial institutions.


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Is this sometimes also known as supply and demand?

    Surely if more money is made available to purchase certain items then the purchase price increases.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm