Who shall guard the guards? Mark Carney has pledged that the Bank of England he leads will meet the highest standards of accountability and transparency in its role as regulator of the City of London. Yet there continues to be serious public disquiet about the thoroughness of an inquiry by Lord Grabiner, commissioned by the BoE last year to investigate its own conduct in connection with the manipulation of the foreign exchange market.

In his report Lord Grabiner cleared BoE officials of any misconduct but criticised its chief forex dealer, Martin Mallett, for failing to tell superiors of his concerns something was amiss in the foreign exchange markets. He had been part of an informal panel of dealers intended to gather and share information from the markets. The US Department of Justice, which has asked to interview a senior trader at Royal Bank of Scotland concerning the scandal, appears to be focusing on this panel and whether it was involved in collusion.

Yet the issue goes much deeper than the inquiry acknowledged. That is because, whether inadvertently or by design, the BoE set the original terms of the Grabiner inquiry far too narrowly.