According to inquiries and a report by The Times, the Bank of England has admitted that their press conferences have been eavesdropped on by hedge funds before they’ve been publicly broadcasted.
According to the bank, an audio feed that was put in place as a backup to the video broadcast, in the event of a failure, has been misused by one of their suppliers. They also stated that this supplier’s access has now been revoked and that the eavesdropping was a “wholly unacceptable use of the audio feed” that was being investigated further.
The misuse of the backup audio feed resulted in traders being able to listen to Mark Carney and his officials between five and eight seconds before the press briefings were broadcast publicly. This audio feed provided an advantage to high-speed traders, like currency speculators who can make millions with tiny market moves.
Interest rate decisions and other market sensitive matters announced by bank officials in these press conferences can affect market assets and the value of sterling within fractions of a second.
The Times reported that the eavesdropping carried out on the press conferences had unfortunately occurred since at least the start of this year, and that Financial Conduct Authority, the market regulator, is looking at the issue. The report also said that the eavesdropping service was sold onto traders with a subscription fee and then a cost of between £2,500 and £5,000 for each press conference. According to The Times, traders were also offered press conferences from the European Central Bank, the Bank of Canada and the US Federal Reserve.
In a statement, the Bank of England said:
“The Bank operates the highest standards of information security around the release of the market sensitive decisions of its policy committees.”