The U.K. Treasury has urged the Bank of England to look into requiring time stamps for all currency transactions as part of its overhaul of how various markets work, an official at the ministry said.
Time stamps would provide a paper trail for clients to see when exactly their spot trades were executed, making them less vulnerable to being overcharged by banks claiming their orders had gone through when the rate was worse, according to advocates of the change.
The Treasury official asked not to be identified, citing ministry policy.
A BOE official declined to comment on the issue. The central bank will publish final recommendations for the Fair and Effective Markets Review in June. It’s a joint effort, conducted along with the Treasury and the Financial Conduct Authority, focusing on how to make the fixed income, currency and commodity markets operate more fairly.
Foreign-exchange practices have been under scrutiny for almost two years, as authorities around the globe investigate allegations of corruption in the $5.3 trillion-a-day currency market involving some of the world’s largest banks. The U.S. Department of Justice last year interviewed bankers about their “mark-up” practices, people with knowledge of the matter have said.
The U.K. House of Commons was dissolved last week, meaning Britain has no lawmakers until after the May 7 general election. Austin Mitchell, now retired as a Labour member of Parliament, has urged the government to mandate time stamps, saying the practice allows banks to “skim points” from clients.
The Financial Times reported that Andrea Leadsom, the Conservative Party economic secretary to the Treasury, had contacted the BOE urging time stamps be included in the Fair and Effective Markets Review recommendations earlier.