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Screenshot of a breaking news alert e-mail from Q2 2017
In November last year, the Bank of England let its chief currency dealer Martin Mallett go, citing serious misconduct as the reason, just one day before the publication of the review into whether the Bank knew about the rigging of foreign exchange markets as part of an investigation led by Lord Grabiner into the British central bank’s potential involvement in FX rate manipulation.
Just a few months on, subsequent to the report by Lord Grabiner which cost £3 million to compile, which cleared the Bank of England and its employees of ‘improper conduct’ last year, a question mark continued to hang over the series of events that led to Mr. Mallett’s dismissal.
Bank of England Governor Mark Carney was still required to face the Treasury Select Committee, a division of the British government, to clarify the reasons why Mr. Mallett was let go, with the result having emerged today as being the confirmation of at least 20 examples of misjudgements.
According to a report by Business Insider, this also included “inappropriate language on multiple occasions and included inappropriate attachments on emails.” On top of that, after a review of millions of incidences of correspondence across the phone, email and through chatrooms, the BoE found that Mallett had given his personal opinion over the central bank’s policy.
Governor Carney said these incidences violated the BoE’s information technology and confidentiality policies and, in turn, some of the information could have been misconstrued by traders.
At the time that the Bank of England let Mr. Mallett go in November, the review led by Lord Grabiner found that Mr. Mallett had failed to escalate concern that traders at top banks could be manipulating parts of the global FX market, which is centered on London. However, it also said the dealer did not act in bad faith.
Reuters today reported that Governor Carney gave more details today about the dismissal. He added that he felt Mr. Mallett’s failure to tell managers about his concerns amounted to misconduct.
Governor Carney told a parliamentary hearing that a trawl through eight years of emails and instant messages had uncovered one instance where Mr. Mallett sent a confidential document to someone outside the Bank of England and another where he gave a personal view on monetary policy.
Mr. Mallett’s job involved regular contact with currency traders, who often communicate in an informal manner, to glean information on currency markets which might help the Bank of England.
“It is disappointing,” Governor Carney said. “This is an employee who in other respects had served the Bank well. But with a senior officer of the Bank with multiple misjudgments, when you have those facts in front of you, you have to act.”