Bank probe reveals ‘series of misjudgments’

A Bank of England internal probe revealed a “series of misjudgments” by a senior member of staff including the leaking of a confidential document and sending of inappropriate emails, MPs in the UK were told by governor Mark Carney yesterday.

Chief currency dealer Martin Mallett was sacked after being found to have made at least 20 such errors, following an investigation into what the bank knew about the foreign exchange rate-rigging scandal, Mr Carney said.

The failings prompting his dismissal were not related to the central findings of the report — which the governor described as his failure to “escalate” any awareness of “the potential of wrongdoing” in the market.

His dismissal was announced in November on the same day that six banks were fined £2.6bn by regulators, including the UK’s Financial Conduct Authority (FCA) over the forex scandal.

Mr Carney said the internal probe, which was led by Lord Grabiner QC and trawled through emails and chatroom conversations, brought to light “information that could have brought the bank’s public reputation into disrepute”.

He told the Treasury Select Committee: “We discovered a series of misjudgments that Mr Mallett had made unrelated to the Grabiner inquiry. There were at least 20 examples of this.”

These included violation of the bank’s IT and confidentiality policies, he said, as well as “sharing, on one occasion, a confidential Bank document with market participants”.