By Jonathan Davies

The Serious Fraud Office (SFO) has announced that it is investigating the liquidity auctions held by the Bank of England during the financial crisis.

The Bank of England launched its own investigation last year before referring the matter to the SFO, which deals with criminal matters.

The auctions allowed banks access to extra cash following the collapse of Northern Rock.

The Bank of England confirmed the investigation had been passed onto the SFO, but made no further comment. Lord Grabiner QC, a senior barrister, will conduct the investigation.

Andrew Tyrie MP, chairman of the House of Commons Treasury Select Committee said passing it onto the SFO was the "right thing to do".

"We must now await the outcome of the SFO's work," he said. "The sooner their findings are published, the better."

Lord Grabiner previously investigated the Bank's involvement in the manipulation of foreign exchange markets in March 2014 but said at the time: "I have found no evidence to suggest that any Bank official was involved in any unlawful or improper behaviour in the FX market."