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The Bank of England has set out a new code of conduct aimed at promoting integrity across money markets Daniel Leal-Olivas/ Getty Images

The Bank of England has set out a new code of conduct aimed at promoting integrity across money markets.

The voluntary UK Money Markets Code is designed to clean up the City of London's reputation following a series scandals in recent years that have ranged from interest rate rigging to trading sex parties in exchange for fraudulent loans.

Market participants should sign up to six core principles around ethics, governance, risk management, confidentiality, execution and settlement.

The Bank said the aim is that "participants should always act in a manner to promote the integrity and effective functioning of these markets".

The new best practice standards replace existing guidelines covering the lending and gilt markets, as well as rules for brokers. The Bank says it expects the new code should be "embedded" across market by January 2018.

Key principles in the new code include:

* Participants are expected to behave in an appropriate and professional manner

* Participants are expected to maintain a control environment to effectively manage the risks associated with their engagement in the UK market

* Participants are expected to be clear and accurate in their communications, and to protect relevant information to support effective communication

* Participants are expected to put in place effective and efficient processes to promote the secure, smooth, and timely settlement of transactions

Chris Salmon, the Bank's executive director for markets said: "The UK Money Markets Code sets out a clear, principles-based framework for how all participants are expected to promote the integrity of the deposit, repo and securities lending markets."

Salmon added that firms should "embrace the new code and embed the high standards of behaviour it sets out".

Over the last few years banks across Europe have paid out billions to settle regulator claims that they tried to rig the Libor interest rate, used to set trillions of dollars of financial products from mortgages to complex derivatives.

Earlier this year Lloyds Banking group set aside £100m in compensation and has already written off about £250m of fraudulent loans made as a result of the HBOS Reading bribery scandal, which saw six people, including two former HBOS employees, jailed for a total of just under 48 years.

This scam centred on small businesses that had run into trouble and took place between 2003 and 2007, before Lloyds rescued HBOS, resulting in a disastrous takeover in 2009 during the financial crisis.

It involved bribery with sex parties, luxury holidays, expensive watches and cash to refer companies that were HBOS clients to a consultancy firm called Quayside Corporate Services (QCS). The troubled businesses were then asset-stripped by QCS.