Further to the evidence we heard earlier in the year, as part of our inquiry into quantitative easing, the Treasury Select Committee today heard evidence from Paul Fisher, the Executive Director of Markets at the Bank of England, and Robert Stheeman, the Chief Executive of the Debt Management Office.

The TSC was very interested in questioning the BoE and the DMO on the likely effects once the process of unwinding QE begins, and how the markets may react. During my turn to question Mr Fisher and Mr Stheeman, I took the opportunity to focus on the potential for rigging of gilt auctions, given the LIBOR scandal and the recently announced investigation into potential oil price-fixing. We also saw, in October 2011, the cancellation of an auction of gilts due to fears that the price was moving in some manipulated way.

I was concerned that Mr Fisher could not categorically say that there had not been an attempt to rig a gilt auction, although I accept his point that the Bank is not an investigative authority and has therefore asked the relevant body, then the FSA and now the FCA, to look into the matter. I did, however, welcome his statement that clear and direct action would be taken against any individuals or banks found to be manipulating a gilt auction.

It was also disconcerting that neither Mr Fisher nor Mr Stheeman could rule out collusion across the banking sector in competitive bidding within a gilt auction with the intention of putting the price up.

You can review the transcript from the TSC evidence session here, and my contributions are on pages 23 to 28. You can also watch my exchange with Mr Fisher and Mr Stheeman below.