Rolet stepped down in November, a year earlier than planned, and an attempt on Tuesday by hedge fund shareholder TCI to fire LSE Chairman Donald Brydon over his handling of the departure was thrown out in a shareholder vote.

Carney told parliament's Treasury Select Committee on Wednesday that he and Financial Conduct Authority CEO Andrew Bailey had multiple conversations with Rolet before his departure.

"It was a slightly Kafka-esque situation where there was a shareholder who wanted the CEO to continue, and the CEO had no intention to continue under any circumstances," Carney said.

"It wasn't going to happen."

Rolet left on the day after Carney told a news conference that he was "mystified" by the row over the Frenchman's original plan to depart by the end of 2018 once a new CEO was found.

Carney received a "thank you" from Rolet for helping to clear up the situation, he said on Wednesday.

Carney also warned that any attempts by the European Union to force a shift in the clearing of euro-denominated transactions from London to the EU after Brexit would backfire on the bloc. The LSE's LCH clearing house unit is regulated by the BoE and dominates euro clearing.

The clearing of transactions between two EU counterparties at LCH is only a small percentage of the total volume handled by LCH. Inefficiencies in splitting up the market would increase costs for EU firms by 20 to 60 billion euros a year, Carney said.

"It is in the end a cost that would be borne by European pension funds and industrials, ultimately European households," Carney said.

(Reporting by Huw Jones; Editing by Adrian Croft)