Central banks slam Bloomberg for breaching privacy norms
15 May 2013
Bloomberg News, the widely trusted news and financial information agency, has been accused of ''reprehensible'' behaviour by the Bank of England after it emerged that Bloomberg reporters had been using the central bank's information terminals to track users' activities.
''The protection of confidential information is vital here at the bank. What seems to have happened at Bloomberg is reprehensible,'' a BoE spokesman said, in the strongest expression of its disapproval of journalists accessing what it sees as confidential information.
It was one of the toughest assessments yet of Bloomberg's practice of giving reporters limited access to data considered proprietary, such as when a customer logs in, contacts the help desk or delves into the system for information about specific asset classes, like equities or bonds.
The list of central banks that have said they were examining Bloomberg's use of data includes the US Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of Canada, Germany's Bundesbank and the Hong Kong Monetary Authority; but they have avoided any direct comment on the matter.
The BoE said, ''Bank officials are in close contact with Bloomberg, who have provided assurances to ensure that this does not happen again. We will also be liaising with other central banks on this matter.''
In a statement, Bloomberg said, ''We regret the Bank of England has taken this position but we'll continue to engage with its management and staff to address their concerns.''
In Germany, a Bundesbank spokesman said, ''We're also in touch with other central banks. The protection of confidentiality is also essential for us and we expect Bloomberg, like all data providers, to fully guarantee confidentiality.''
Staff at the European Central Bank had also discussed the issue informally with other central banks, according to reports.
The comments come as a data-driven company that prides itself on its near-infallible technology has been embarrassed by a rare moment of human error, with the revelation that more than 10,000 clients' messages had leaked online.
The messages were three or four years old, and they were swiftly taken offline after the Financial Times began investigating, but they included trade details and other sensitive information from some of Bloomberg's largest banking clients.
The fact that Bloomberg had the messages, however, reflects the trust clients have in it.
Several banks entrust messages to Bloomberg each day, so it can ''scape'' them on their behalf. Bloomberg extracts hard-to-find pricing details about over the counter trades, which it returns to those clients in a form they can chart.
Bloomberg only allows a few staff access to the messages, and does not use the data internally. Its strict security policies have been tightened further since the leak of messages from 2009 and 2010.
While there is no evidence the access given to Bloomberg reporters led to the disclosure of confidential data from central banks, the potential for security breaches is a matter of concern for policymakers.
Their effectiveness in guiding the global economy depends on keeping the process of setting interest rates and using other monetary tools confidential, and they go to great lengths to protect against leaks.
