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Bank of England deputy urged to quit over undeclared conflict of interest
March 7, 2017 / 11:06 AM / 5 months ago

Bank of England deputy urged to quit over undeclared conflict of interest

The Bank of England is seen in the City of London, Britain, February 14, 2017.Hannah McKay

LONDON (Reuters) - The Bank of England's new deputy governor Charlotte Hogg was urged to quit by a lawmaker on Tuesday after she admitted failing to declare a potential conflict of interest about her brother's role at Barclays (BARC.L), a bank overseen by the BoE.

Hogg joined the BoE in 2013 and started as deputy governor on March 1. But she only revealed her brother's job guiding Barclays' response to bank regulation when she prepared information for lawmakers reviewing her appointment last week.

"I should have formally declared my brother's role when I first joined the Bank. I did not do so and I take full responsibility for this oversight," Hogg said in a letter to the lawmakers which was released on Tuesday

Hogg, whose earlier career was in retail banking, became the BoE's first chief operating officer at the same time as Governor Mark Carney started at the BoE in 2013. She had a brief to modernise the central bank's management as it took on wide-ranging responsibilities for financial services.

Her family have played a prominent role in British public life, producing several generations of senior politicians and lawyers, and her appointment drew earlier concern from some lawmakers that it would do little to broaden the BoE's thinking.

The chair of the BoE's supervisory body, Anthony Habgood, said on Tuesday that Hogg's failure to tell the BoE of her brother's high-level job in financial services was "very serious".

Andrew Tyrie, the Conservative head of parliament's cross-party Treasury Committee, said the panel's members would need time to consider its response to the surprise revelation.

But one member immediately called on Hogg to resign. "Last week Charlotte Hogg proudly told this committee that she actually wrote the Bank's code of conduct and has now admitted to repeatedly breaking it," Labour lawmaker John Mann said.

"This is a simple question about standards in public life, and in this regard she has failed and must resign," he said.

Hogg's appointment does not require approval by parliament, and the BoE said it had nothing to add to Habgood's comments to the parliament committee earlier on Tuesday.

Conflict of Interest?

After Hogg's appointment hearing last week, the parliament committee said she needed to take steps to address perceptions of a conflict of interest in her new role.

Hogg will be responsible for overseeing financial markets including the bank's massive bond-buying stimulus programme, and will also sit on committees overseeing British-based banks.

As well as her brother at Barclays, her mother is a non-executive director of another British bank regulator, the Financial Conduct Authority.

Hogg's father is a former cabinet minister who chose not to seek re-election in 2010 after public outrage about reports - which he partly denied - that he claimed parliamentary expenses to clean the moat of the family's 13th century manor house.

Habgood, the chairman of the BoE's Court of Directors, which is responsible for the central bank's strategy, told lawmakers on Tuesday that Hogg's omissions were "a very serious breach" of the BoE's compliance rules.

But Habgood's deputy, Bradley Fried, said Hogg's errors did not amount to a "hanging offence" and should be considered in the context of her otherwise good performance at the BoE. Habgood said there had been no actual conflict of interest.

Jacob Rees-Mogg, a Conservative lawmaker on the committee who has often been critical of the BoE under Governor Mark Carney, said he was concerned by their response.

"What's worrying me is that the Bank is, or the Court is, pretty complacent about this," he said. "It's that ... 'we wont' investigate it, we'll just say there's no conflict because the brother, he's probably like us, he's another good chap'."

"I've moved on from being concerned about Ms Hogg's error to being concerned about the Bank's reaction - and that the Bank's reaction has been pretty unrigorous. It's taking bland assurances and passing them on to us," Rees-Mogg said.

Writing by David Milliken; Editing by William Schomberg and Hugh Lawson

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