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BoE says it should have spotted news conference streaming 'misuse' sooner

David Milliken and Andy Bruce
·2-min read
FILE PHOTO: The Bank of England is seen in the City of London
FILE PHOTO: The Bank of England is seen in the City of London

By David Milliken and Andy Bruce

LONDON (Reuters) - The Bank of England said it should have been faster to figure out that a company it had hired to stream its news conferences on YouTube was using this access to sell a faster audio feed to financial traders without the BoE's consent.

An internal report published by the BoE on Wednesday gave numerous suggestions on how to stop the same thing happening again, while a separate inquiry by Britain's Financial Conduct Authority found no misconduct by the company involved.

The central bank barred the supplier, Encoded Media, in December 2019 after discovering the company had been selling access to the audio feed.

The quarterly news conferences offer valuable insight from the BoE's governor and his deputies after major policy decisions - and the ability to hear their comments a few seconds faster than on video could confer a big advantage to traders.

"Our Review has indicated that there were occasions where, with the benefit of hindsight, this misuse by a third party supplier of the Bank's audio feed could have been identified sooner by the Bank," the BoE said.

Encoded Media was not immediately available for comment.

The FCA, in a parallel investigation, said it did not find any breach of insider trading rules or other misconduct that fell under its jurisdiction.

"We do not believe the audio feed contained any inside information, nor have we found any activity of concern or misconduct. Our enquiry is now closed," the FCA said.

The BoE said it received a specific allegation about the use of the audio feed in late 2018, but did not fully investigate it as staff did not believe the news conference could be compromised.

It also failed to spot advertisements on social media offering "fast access" to the BoE's news conferences, the report showed.

"Whilst the Bank is confident that the contents of the Bank's policy announcements...themselves were never compromised, the incident raised questions about the controls relating to the Bank's press conferences," the BoE said in its response to the report conducted by its internal auditors.

The BoE said Encoded Media had been on a standard contract, and that it would apply tighter checks and bespoke contracts for this type of work in future.

Before the coronavirus pandemic, BoE news conferences were broadcast live via a standard over-the-air transmission and also streamed on YouTube.

There is a slight broadcast delay for video from both sources, and audio can be sent faster.

The BoE said it fully accepted the findings of the report and that Governor Andrew Bailey had commissioned an external review of its support services to work out if further improvements were needed.

(Editing by Mark Heinrich)