The Bank of England risks being dragged into a criminal investigation into how it propped up ailing lenders during the financial crisis , it emerged last night . The central bank supplied high street lenders with emergency funds in 2007 and 2008 through so-called money-market auctions to stop the banking system freezing up as the credit crunch intensified . But it last year instructed a leading barrister to look into whether any of its staff knew of , or even participated , in attempts to rig the auctions . The Bank of England ( pictured ) risks being dragged into a criminal investigation into how it propped up ailing lenders during the financial crisis . The Bank has since passed on the results of the inquiry by Lord Grabiner QC to the Serious Fraud Office which is now examining the findings . The SFO said it was ‘ investigating material referred to it by the Bank of England concerning liquidity auctions during the financial crisis in 2007 and 2008 ’ . It is thought that the probe could lead to a full-blown criminal inquiry – although it is unclear whether such an investigation would focus on Bank officials or traders outside the central bank . An official criminal investigation would be a blow to the reputation of the Bank following a series of scandals that have rocked the financial sector . Senior Tory MP Andrew Tyrie , who chairs the Treasury committee in the Commons , said the bank was right to refer inquiry to Serious Fraud Office . In a statement last night , the Bank said : ‘ Following the confirmation by the SFO that it is investigating material referred to it by the Bank of England , the Bank can now confirm that it commissioned Lord Grabiner QC to conduct an independent inquiry into liquidity auctions during the financial crisis in 2007 and 2008 . ‘ Following the conclusion of that initial inquiry , the Bank referred the matter to the SFO on 20 November 2014 . ‘ Given the SFO investigation is ongoing , it is not appropriate for the Bank to provide any additional comment on the matter at this time. ’ Senior Tory MP Andrew Tyrie , who chairs the Treasury committee in the Commons , said the central bank was right to refer the findings to the SFO . He added : ‘ We must now await the outcome of the SFO ’ s work . The sooner their findings are published the better. ’ The Bank launched the money-market auctions during the financial crisis in an attempt to ensure that high street banks could continue to lend to households , businesses and each other . The investigation into the auctions comes as the central bank faces increased scrutiny over its governance and oversight of the financial system . A separate inquiry by Lord Grabiner into the rigging of the foreign exchange markets cleared Bank officials of any wrongdoing . The Bank revealed on Tuesday it has uncovered 50 instances of market manipulation and that 42 of them have been handed to the Financial Conduct Authority .
Bank gave high street lenders emergency funds via money - raising auctions . Move was to prevent banking debts winding up as currency crisis took hold . Barrister probed whether any staff knew or participated in securities auctions . Findings have now been referred to Serious securities Office for examination .