Bank of England says it could have identified a security breach earlier | Business

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The Bank of England said it could have acted faster to identify a security loophole that gave hedge funds quick access to its press conferences on market developments.Publishing the findings of an internal report on the incident that plagued the Bank in the final months of Mark Carney’s tenure as governor, Threadneedle Street said it had set out a series of measures to strengthen its security systems.

He also said Andrew Bailey, who replaced Carney in March, had commissioned an external review to determine if further action was needed.

In a statement released on Wednesday, the Bank said the internal review o had “indicated that there were occasions when, in hindsight, this misuse by a third-party provider of the Bank’s audio stream could have been identified earlier. by the Bank ”.

The bank said it has not regularly monitored social media or the wider internet for evidence of companies reporting “inappropriate access to its publications and press conferences,” but is now assessing whether further surveillance could. be carried out in the future.

In December, a bank tech vendor reportedly sold access to a backup audio stream for press conferences Carney gave alongside his interest rate decisions, which could give unidentified investors length lucrative advance to interpret his comments on market developments. The breach was missed by the Bank and was only discovered after an investigation by the newspaper.

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The Guardian revealed that the incident followed a restructuring of the banking department and the loss of several senior employees in the process.

Essex-based company Encoded Media had its status as a supplier to the bank revoked the same month after media inquiries. The bank disabled the company’s access to a backup audio stream after The Times newspaper first revealed the breach. Threadneedle Street said at the time that an unidentified third-party vendor would not attend future press conferences, calling the sale of access “totally unacceptable” and saying the stream had been “misused”.

Separately, the Financial Conduct Authority said on Wednesday it was dropping an investigation into the misuse of the audio stream.

The city watchdog said in a statement: “We have looked at these issues thoroughly. We do not believe the audio stream contains inside information, and we did not find any activity of concern or misconduct. Our investigation is now closed and we have notified the Bank and other parties related to the review. “

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