By David Milliken
LONDON (Reuters) - The Bank of England's former chief foreign exchange dealer broke internal rules on confidentiality and information technology policy before his dismissal last year, BoE Governor Mark Carney told legislators on Tuesday.
The BoE fired Martin Mallett in November as it announced the findings of an independent review into what staff knew of attempts by foreign exchange traders at leading banks to manipulate currency rates.
The review found that Mallett had failed to escalate concern that traders at top banks could be manipulating parts of the $5 trillion-a-day global market, which is centred on London. But it also said the dealer did not act in bad faith.
Carney gave more details on Tuesday about the dismissal. He added that he felt Mallett's failure to tell managers about his concerns amounted to misconduct, too.
Carney told a parliamentary hearing that a trawl through eight years of emails and instant messages had uncovered one instance where Mallett sent a confidential document to someone outside the BoE and another where he gave a personal view on monetary policy.
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.
Carney said Mallett had been responsible for more than 20 breaches of BoE policy, including emails with inappropriate language or attachments, though no dishonesty.
"It is disappointing," 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."
Mallett has previously declined to comment on his dismissal. He could not be reached for comment immediately on Tuesday.
Last week, the BoE said it had made a series of changes to how it gathered information from markets and to improve record-keeping and provide more training for staff.
Carney reiterated that in recent months the BoE had passed on more than 40 cases of possible misconduct for investigation by Britain's Financial Conduct Authority.
Lawmakers asked whether the BoE's review into staff conduct, led by commercial lawyer Anthony Grabiner, was too soft.
Jesse Norman, a Conservative, said the terms of Grabiner's inquiry had not held staff to a sufficiently high standard.
The chairman of the Bank's Court of Directors, Anthony Habgood, said Grabiner had subjected the Bank to scrutiny equivalent to that found in other walks of life.