The case brought against The Bank of England by the liquidators of the notorious Bank of Credit and Commerce International has been dropped.

The British central bank said that the case against it and 22 of its current and former staff collapsed this morning when all the allegations were unconditionally withdrawn in the High Court.

The BCCI was closed by the Bank of England in 1991 after major frauds came to light. The action against the Bank of England was announced in 1993 by the liquidators of BCCI, claiming that it should be held responsible for not acting sooner.

The trial started in the High Court in London in January 2004. The liquidators accused the Bank of misfeasance in public office. This required the claimants to prove dishonesty and bad faith on the part of the Bank and individual officials. These allegations have been unconditionally withdrawn.

Mervyn King, Governor of the Bank of England, said, “I am delighted that the allegations of dishonesty against 22 staff of the Bank of England have been unconditionally withdrawn. There has never been a shred of evidence to support these disgraceful allegations, and the case has collapsed as we always expected it would. The judge himself said this morning that the allegations against all 22 Bank staff were “wholly without foundation”.

“The foolish determination to pursue a hopeless case for so long has also led to a huge waste of creditors’ and taxpayers’ money, and I hope everyone concerned will take a close look at how and why such a very weak case took 12 years to come to an end. The Bank will be seeking the largest possible compensation for its costs,” he added.