The Bank of England is to appoint a fourth deputy governor to oversee banking and markets in the wake of damaging claims that some of its officials knew about alleged foreign exchange rate-rigging.

Bank chief Mark Carney told MPs the Bank was pursuing an investigation into the allegations and the new official would be asked to conduct a "root and branch review" of how it monitors markets.

He added that the Bank would discuss with the Financial Conduct Authority (FCA) and the Treasury "changes that might be warranted" to the foreign exchange market "to ensure that it is a true, fair and open market as people have the right to expect". The governor set out the measures as he was grilled by members of the Treasury Select Committee just days after the Bank suspended an employee over compliance concerns following an internal probe.

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