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BOE chief dealer fired after 20 violations of policies

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The Bank of England's chief currency dealer was dismissed after at least 20 violations of the institution's internal policies were unearthed following a review into whether central bank staff knew about currency rigging.

[LONDON] The Bank of England's chief currency dealer was dismissed after at least 20 violations of the institution's internal policies were unearthed following a review into whether central bank staff knew about currency rigging.

There were breaches of BOE policies on confidentiality and information technology, Governor Mark Carney said Tuesday. They were uncovered during an investigation into allegations central bank staff knew currency traders shared private client information with counterparts at other firms to rig key foreign- exchange benchmarks.

"This is an employee who, in other respects, had served the bank well and had served his community well in terms of charity," Mr Carney told members of the Treasury Committee. "But with a senior officer of the bank, with multiple misjudgments, when you have those facts in front of you, you have to act."

Mr Carney appeared before the committee after lawmakers criticized the conclusions of an investigation by lawyer Anthony Grabiner into the currency allegations. Mr Grabiner's findings cleared central bank employees and were published in November, the same day six banks agreed to pay US$4.3 billion to settle foreign-exchange manipulation probes by regulators in the US, UK and Switzerland.

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Martin Mallett shared an internal BOE document with market participants, ventured personal opinions about bank policy, used inappropriate language on multiple occasions and inappropriate attachments to e-mails, Mr Carney said.

The breaches "could've brought the bank's reputation into disrepute," Mr Carney said.

Mr Mallett didn't immediately respond to an e-mail to his LinkedIn account seeking comment.

Grabiner's report found Mr Mallett had concerns about the practice of dealers sharing information and didn't escalate them, but hadn't acted "in bad faith."

None of the violations showed Mr Mallett had been dishonest, Mr Carney said. Still, the failings uncovered by Mr Grabiner probably would have been enough to lead to his dismissal, Mr Carney said, stressing the decision wouldn't have been for the BOE governor to make.

When asked about reports of another investigation by Mr Grabiner for the BOE into money markets, Mr Carney said, "We at the bank don't provide a running commentary on the inquiries we're conducting."

The Financial Times reported in November that the BOE had started a probe into whether money market auctions it held in 2007 and 2008 were rigged and if employees facilitated the practice.

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