BofE’s ‘Black Wednesday’ forex chief joins hedge fund

William Allen, the Bank of England’s foreign exchange chief during ‘Black Wednesday’ in 1992, has joined a hedge fund.

Allen, who most recently was the Bank of England’s director for Europe and a member of its management committee, has taken up an economist post at London-based Brevan Howard, a spokesman at the hedge fund confirmed.

Allen headed forex at the Bank of England from 1990 to 1994 and spearheaded the bank’s efforts to fend off attacks on sterling from speculator George Soros, among others. At the time, the UK government had tried tie the pound to other European currencies, notably the Deutschmark, through the Exchange Rate Mechanism. But the market took a negative view on the exchange rate and sold sterling aggressively.

The battle between the Bank of England and currency speculators ended on September 16, 1992, known as ‘Black Wednesday’, when the bank surrendered after having lost roughly £4 billion.

Brevan Howard is a $4 billion fixed-income macro hedge fund launched last year.