Mark Carney, the Governor of the Bank of England, pledged to appoint a new Deputy Governor at the Bank to lead a "root and branch" review of its strategy, after suspending an official over the foreign exchange market manipulation scandal.
Carney claimed that there was "no evidence" any Bank of England official had condoned manipulation of the foreign exchange market, as he faced down tough questioning from U.K. members of parliament (MPs).
He defended the Bank against MPs' suggestions it should have been more alert to the possibility of foreign exchange market manipulations, after the matter was raised as part of regular meetings between the Bank and market participants, some of whom have since been arrested over the scandal.
"It is possible foreign exchange traders decided to collude to make their lives easier and richer," Carney said.
In a move likely to have ramifications for the central bank's history, he signaled that he is prepared to make the 420 year-old Bank a more open institution.
Parliament's Treasury Select Committee quizzed Carney and the bank's Executive Director of Markets Paul Fisher about allegations that bank officials condoned or were informed of manipulation in the foreign exchange market or the sharing of confidential client information.
Carney told them: "This is as serious as Libor, if not more so" and that this was an "unhappy situation" after one of them accused him of being "relaxed" about the alleged manipulations. However, he added that he expects that the investigation will "re-confirm" the integrity of Bank employees.