Bank of England passed tech firm for diligence three times
Central bank faces new scrutiny over audio feed leaks
The Bank of England carried out due diligence three times on a tech firm that was later revealed to have passed paying clients early access to market-sensitive information.
The technology supplier Encoded Media was probed three times between 2008 and 2019, yet its status as a supplier to the BoE was only revoked following media inquiries in December.
The revelation has struck a fresh blow to the BoE’s credibility in securing crucial national infrastructure.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The BoE disabled the company’s access to a backup audio feed after The Times revealed the breach and said the company would have no part in future press conferences, calling the sale of access “wholly unacceptable” and saying the feed was “misused”.
Although non-public information was not revealed, the audio feed potentially allowed unidentified paying customers to hear the governor Mark Carney’s highly influential words at press conferences as much as eight seconds ahead of rivals listening via other means – giving a potentially lucrative advantage.
“Eight seconds may not sound like a long time. But in the modern financial world, it’s a valuable head start that can give traders a crucial edge,” explained The Guardian last year.
Mel Stride, the chair-elect of parliament’s Treasury select committee, said he expected the MPs to ask “searching questions” of the outgoing governor, Carney, and his replacement, Andrew Bailey, at hearings this week.
Encoded Media director Wand insisted Encoded did not hijack audio feeds, adding that previous reports had “already caused economic loss to Encoded Media and Statisma, as well as considerable distress to its directors who run an entirely reputable small technology business with limited resources”.
The BoE has previously stated that its restructuring was carried out to strengthen its information security and that it is confident in its ability to protect against security threats.
–––––––––––––––––––––––––––––––For a round-up of the most important business stories and tips for the week’s best shares - try The Week magazine. Get your first six issues for £6–––––––––––––––––––––––––––––––
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
'It may not be surprising that creative work is used without permission'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
5 simple items to help make your airplane seat more comfortable
The Week Recommends Gel cushions and inflatable travel pillows make a world of difference
By Catherine Garcia, The Week US Published
-
How safe are cruise ships in storms?
The Explainer The vessels are always prepared
By Devika Rao, The Week US Published
-
Will the UK economy bounce back in 2024?
Today's Big Question Fears of recession follow warning that the West is 'sleepwalking into economic catastrophe'
By Chas Newkey-Burden, The Week UK Published
-
Interest rates rise to 5.25% for first time in 15 years
Speed Read Inflation is slowing but at 7.9% it remains well above the Bank of England’s 2% target
By Julia O'Driscoll Published
-
Five options to get the UK back to 2% inflation
feature Some economists believe alternatives to raising interest rates are in the country’s best interests
By Sorcha Bradley Published
-
Why aren’t soaring interest rates bringing down inflation?
Today's Big Question PM pins blame for stubborn inflation on fixed-rate mortgages, but economists say the picture is more nuanced
By Arion McNicoll Published
-
Sticky inflation and sluggish growth: why does UK economy continue to struggle?
Today's Big Question Food prices, Brexit and the Bank of England have been blamed for poor economic performance
By Chas Newkey-Burden Published
-
Is it time for Britons to accept they are poorer?
Today's Big Question Remark from Bank of England’s Huw Pill condemned as ‘tin-eared’
By Chas Newkey-Burden Published
-
UK avoids recession - but will anyone notice?
Today's Big Question Think tank says 2023 ‘will feel like a recession for many, regardless of the data’
By Chas Newkey-Burden Published
-
Liability driven investment and its terrifying potential impact on our pensions
feature How did a niche corner of the pension market threaten to bankrupt Britain?
By The Week Staff Published