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(Bloomberg) -- Bank of England Governor Mark Carney, at a private gathering of financiers in Davos, said allegations that bankers rigged market benchmarks look like frontrunning, people at the meeting said.

Some of the executives present were taken aback by what they viewed as Carney’s likening of traders’ efforts to manipulate currency and interest rate benchmarks with the illegal practice of profiting from advance knowledge of clients’ orders, said the people, who asked not to be identified because the talks on Jan. 22 were private.

U.K. regulators toughened their stance on British banks after London was hit by a string of scandals amid allegations that dealers leaked confidential client information and colluded to rig benchmarks ranging from interest rates to the price of gold and currencies. The BOE commissioned its own investigation into whether its staff knew and condoned practices at the heart of the global investigations into currency markets.

“The patience of regulators and politicians toward the banks is still thin,” said Andre Spicer, a professor at Cass Business School in London. “If there is one more scandal of the scale of forex or Libor, then I would expect that regulators and policy makers would be forced to come down harder on the banks.”

Currency Fines

Participants of the private meeting at the annual World Economic Forum included Bank of America Corp. Chief Executive Officer Brian Moynihan and HSBC Holdings Plc Chairman Douglas Flint, according to the people. Spokesmen for the BOE, HSBC and Bank of America declined to comment.

Six firms, including Bank of America and HSBC, paid about $4.3 billion in November to settle probes into allegations traders colluded with counterparts at other firms to rig the $5.3 trillion-a-day foreign-exchange market. About a dozen banks have been investigated and more than 30 traders from London to Singapore have lost their jobs or been suspended.

Front-running was one of the practices criticized in the settlements. In Switzerland, the financial markets regulator ordered UBS Group AG in November to give up 134 million Swiss francs ($145 million) in profits after determining bank employees engaged in practices including front-running. Finma is now pursuing individuals involved in the wrong-doing.

Traders’ instant messages were cited as saying “I was front running EVERY single offer” and “you can front run this as you like, up to you,” according to the Swiss regulator.

The BOE commissioned report faulted the central bank’s chief currency dealer for not escalating his concerns that traders were rigging the markets. The dealer was fired, though the BOE said it wasn’t related to the report.

Banks still face criminal and antitrust investigations as well as further regulatory probes by authorities including the U.S. Department of Justice, the Federal Reserve, the U.K. Serious Fraud Office, and the European Union’s competition commission.

--With assistance from Stephen Morris in London.

To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net; Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net; Michael J. Moore in New York at mmoore55@bloomberg.net To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net; Peter Eichenbaum at peichenbaum@bloomberg.net Heather Smith

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