The Bank of England has played a conflicting role in the scandal over Libor rate-rigging, which the central bank may have known about as early as 2007. Reuters/Suzanne Plunkett

A top Bank of England official was looped into the Libor manipulation scheme as early as 2007, according to prosecutors in the first criminal trial of an individual in the interest-rate manipulation scandal.

Evidence presented in court Wednesday showed Martin Mallet, then the head currencies dealer at the British central bank, receiving emails from a former UBS trader alleged by prosecutors to be the “ringmaster” of the Libor-rigging conspiracy, the Wall Street Journal reports.

If true, the allegations would shed unflattering light on the Bank of England, which has been criticized for failing to act on the long-running interest-rate manipulation scheme. The bank’s highest officials were alerted to Libor-rigging as early as 2008, yet the bank declined to take action.

It wasn’t until 2012 that regulators in the U.S. and U.K. began seriously investigating the conspiracy. Mallet, who went by “The Hammer,” was fired for “serious misconduct” late last year over separate issues.

Libor, short for the London interbank offered rate, is a central benchmark in the global economy. It affects some $300 trillion in loans and contracts, including mortgages, credit cards and student debt.

Big banks around the world have paid more than $9 billion over allegations that traders involved in setting the rate intentionally misreported submissions to bolster their bottom lines. At the time, Libor was set daily by averaging the interest rates major banks said they were charging to each other.

The revelations surrounding Mallet, whose involvement in the Libor scandal remains unknown, came on the second day of the trial of Tom Hayes, whom prosecutors have identified as a central player in the scheme. Hayes has pleaded not guilty and his defense hasn’t yet had the opportunity to respond to allegations.

Also on Wednesday, prosecutors revealed that Hayes' alleged Libor gambit had its start in 2006. By early 2007, emails presented at court showed, Hayes was requesting traders at JPMorgan and other banks nudge their submissions up or down as a “favour” to him.

The trial is expected to last ten weeks.