Oh, so now they notice?

From the BBC:

The Serious Fraud Office (SFO) is investigating the way the Bank of England lent money to banks during the financial crisis, the Bank has said.

The Bank commissioned its own inquiry last year, then referred the matter to the SFO. Liquidity auctions enabled banks to access extra cash during the credit crunch that followed the collapse of Northern Rock...

As the financial crisis bit in 2007, the Bank launched a new type of liquidity auction - called long-term repo open market operations - whereby banks were allowed to put up a wider range of assets as collateral against the three-month loans. These assets included government bonds and mortgage-backed debt securities...


The exact focus of the SFO investigation is unknown, but BBC business editor Kamal Ahmed believes it may want to find out whether the banks exaggerated the value of such collateral to makes themselves look stronger, with or without the knowledge of Bank of England officials.

Surely we all knew this anyway?

The whole thing since 2007 has been a freebie for the banks and a blatant bank bail out at taxpayers' risk and expense. If the banks' assets had been worth what they told the Bank of England they were worth, then they wouldn't have been insolvent/illiquid and hence the bail out would not have been necessary in the first place.

The question answers itself: the Bank of England must have known that banks were overstating the value of their assets, end of discussion.

The S F O is verging on becoming, if it isn't already,

a laughing stock, and who knows what the next bit of "bad press" is going to be ....

So, you surely have to feel some sympathy for new SFO Director David Green, who may well be wondering what he has let himself in for - all that adverse comment from the PAC about his predecessor's apparent attitude towards "the rules governing the approval of  redundancy/compensation/severance packages for indispensable people who are nevertheless leaving" and the terms some of those "indispensable people" were employed on, and the basis on which they were recruited; and some of the things they did that they didn't ought to, like arranging consultancy contracts without the proper approval; and murmurings of "corruption probes" and "police investigations" - hardly the sort of stuff the nation's watchdogs to root out Fraud etc. would want to be tarred with.  

Mind you, he could perhaps lessen the burden on himself by taking a leaf out of his predecessors books- 

1. arrange a consultancy with some HR experts to investigate SFO recruitment practices and advise on improvements
2. get in one of the Big 4 Accountancy firms to carry out an audit of SFO financial governance and advise on improvements
3. invite in those Consultants that were contracted by the previous regime and ask if they've any ideas on what they were supposedly employed to do for the SFO, and 
4. ask for an quick, informal, between people on the same side private looksee at the names on that SOCA list  and thereby facilitate access to an efficient "private eye" who can start digging and leave no stone unturned in finding out "what has been going on at the SFO ferrcrissake" and perhaps in particular why those consultancies were entered into, who by, and what for; just in case a different answer is thrown up to that materialising via suggestion 3

 ... preferably getting the requisite permissions and approvals for all of these expenditures in advance, of course :-)

Update (not quite 24 hours later) re : "and who knows what the next bit of 'bad press' is going to be ...."  

Serious Fraud Office admits losing thousands of documents linked to BAE

Anti-fraud unit says it accidentally sent 32,000 pages obtained as part of investigation into defence firm to wrong person

and in this article we are informed "In addition, David Green, the director of the SFO, has launched an independent wide-ranging review of all the organisation's business processes."  Whether that means he is doing it all himself or following any of yesterday's suggestions, the article doesn't say ...     

Serious Fraud Office diversifies into selling booze