Bank criticised in BCCI report: US Senate inquiry to draw 'some hard conclusions' about UK regulator's performance
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Your support makes all the difference.THE Bank of England is expected to be severely criticised in a US Senate report into the collapse of the Bank of Credit and Commerce International, due to be published this week.
The 750-page report is the result of a detailed investigation by the Senate Foreign Relations Sub-committee, chaired by Senator John Kerry. Other regulatory watchdogs in Europe and BCCI's major shareholders in Abu Dhabi are also likely to be slated.
Only three, closely guarded, copies of the Kerry report exist. However, one senior US official close to the inquiry said the document 'pulls no punches'. He added that it 'draws some hard conclusions' about the behaviour of the regulatory authorities in the UK. Bank officials, he said, 'might feel it attacks them - it is a very meaty document'.
Senator Kerry's findings are thought to echo those of Lord Justice Bingham, who was asked by the British Government to examine the Bank's supervision of BCCI.
The Bingham report, which has yet to be published, is understood to contain evidence that the Bank had sufficient knowledge of serious fraud at BCCI well before it was wound up in July last year. Lord Justice Bingham is believed to have heard from Price Waterhouse, BCCI's auditor, that it first expressed concern to the Bank about the possibility of fraud at BCCI as early as the beginning of 1990.
Senator Kerry, who had a much wider brief than Lord Justice Bingham, is likely to reveal that the US authorities were also telling the Bank of their own misgivings about BCCI. His sub-committee interviewed hundreds of witnesses, including members of the intelligence-gathering agencies.
The US official said the idea being expressed in some pro-Bank circles in London that the US report was not as important as Lord Justice Bingham's, and could therefore be ignored, was 'rubbish - it looks at the whole global view'.
Both reports are likely to clear the Prime Minister and Cabinet colleagues of any blame. But senior Bank officials, including Robin Leigh-Pemberton, the Governor, and Brian Quinn, the director in charge of supervision, may not escape censure. Earlier this year, Mr Quinn told a Commons select committee that it was not until the Bank received a formal report on BCCI in June 1991 that the decision to close it down was taken. The report, he said, 'completely transformed our view of BCCI'.
The role of mid-level Bank officials is also understood to have received close scrutiny. The officials charged with day-to-day policing of BCCI were Roger Barnes, head of banking supervision, and John Bartlett, his deputy. Neither man could be reached on Friday.
A Bank spokesman stressed there was no question of any officials having been suspended for their roles in the affair.
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