Bank of England's reputation is on the line

For almost 200 years, Royal Guardsmen in their red tunics stood sentry outside the Bank of England on Threadneedle Street. Known as the Bank Piquet, the detachment guaranteed the security of the vaults and conveyed a strong message of authority that is beyond reproach to the unruly mob of bankers who have occupied the Square Mile down the years.

However, to some the sight of the guardsmen in Napoleonic-style uniforms and bearskin caps stood outside its doors is typical of an institution that is still struggling to modernise more than 40 years after the last sentry was stood down. The latest financial scandal to have rocked the City concerning foreign exchange trading has now pulled in the Bank and raised profound questions about its transparency and a historic culture of secrecy, which critics argue the Governor, Mark Carney, needs to change.

The Bank has given few details about the circumstances concerning the suspension of an employee this week following an internal inquiry into forex manipulation other than to say the employee had “breached internal control processes”.

It has been alleged that traders at major banks shared information in order to manipulate benchmark rates, and that the Bank made no effort to stop them. The scandal deepened on Thursday when two senior currency traders were suspended by banks and the Governor will have to face tough questions in front of MPs on the matter next week.

With the Bank’s venerable reputation at stake, perhaps its time to bring back the guardsmen.

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