BoE’s new deputy governor must tackle conflicts of interest
LONDON – The Bank of England’s new deputy governor, Charlotte Hogg, needs to take steps to avoid possible conflicts of interest in her role as one of Britain’s top financial regulators, senior British lawmakers said on Thursday.
Hogg told a parliament committee on Tuesday that her brother helped set strategy at Barclays, but that she had not decided for certain if she would remove herself from decisions which affected his employer.
She also said she saw no potential for conflict of interest over her mother’s role as a non-executive director of the Financial Conduct Authority, Britain’s main regulator to combat irregularities in markets.
The Bank of England has wide-ranging powers over British banks, and Hogg will be its deputy governor for markets and banking, sitting on committees that set interest rates as well as decide bank capital rules and other key regulatory issues.
In a report on Hogg, published on Thursday, the committee said she had sufficient professional competence and personal independence to be deputy governor, but needed to do more to avoid any real or apparent risk of impropriety.
“Steps will need to be taken to ensure she puts in place arrangements to address conflicts of interest or the appearance of such conflicts,” the report said without giving details.
The Treasury Committee lacks the power to block BoE appointments.
Members of the committee also reiterated concerns about a lack of diversity of thought among BoE policymakers – a factor they blame for the central bank’s patchy forecasting record and poor preparation for the 2007/08 financial crisis.
Hogg was previously the BoE’s chief operating officer, and comes from a background in retail banking, in contrast to most members of the BoE’s Monetary Policy Committee who have advanced qualifications in economics.
During Tuesday’s hearing, she was more comfortable with lawmakers’ questions on financial regulation than those relating to economic theory.
“We recognise that the value Ms Hogg will bring to the MPC is from her operational experience in the financial services sector, rather than a field more directly applicable to the conduct of monetary policy,” the committee said. -Reuters