Top BOE official steps down after flak from lawmakers

Ms Hogg failed to disclose that her brother works for a bank she would help to regulate. The issue was made worse by the fact that she had earlier told a hearing she had always declared potential issues.
Ms Hogg failed to disclose that her brother works for a bank she would help to regulate. The issue was made worse by the fact that she had earlier told a hearing she had always declared potential issues.PHOTO: AGENCE FRANCE-PRESSE

Deputy governor of British central bank didn't disclose potential conflict of interest

LONDON • Ms Charlotte Hogg yesterday resigned as deputy governor of the Bank of England (BOE) after criticism for failing to disclose that her brother works for a bank she would help to regulate.

The resignation is an embarrassment for the BOE and puts it under pressure to show it has learnt from two potential conflict-of-interest issues in the past few years.

Ms Hogg, chief operating officer (COO) since 2013, took over as deputy governor for markets and banking at the start of this month, which includes responsibilities for bank supervision.

The BOE issued a statement on her resignation following a report from Parliament's Treasury Committee that said Ms Hogg's "professional competence falls short of the very high standards required to fulfil the additional responsibilities of deputy governor".

The 46-year-old is the scion of a British political dynasty. Her father served in the Conservative governments of Margaret Thatcher and John Major, her mother was an adviser to Mr Major, and her grandfather and great-grandfather were both lord chancellors, heading the judiciary.

Her brother Quintin Hogg is a director at Barclays, and Ms Hogg revealed this month that she failed to report this when she was hired as COO, a role that oversaw compliance at the central bank.

She also did not mention it in her application for deputy governor, and it only came to light after her appointment, in a questionnaire she completed for lawmakers.

The issue was made worse by the fact that she had told a hearing on Feb 28 that she had always declared potential issues.

Lawmakers had approved Ms Hogg's appointment on March 2. But yesterday, they said they would set aside that recommendation because, "had it known then what has since been disclosed, it would have taken a different view".

Ms Hogg had been charged with revamping the three-century-old bank. She will remain in her roles for an unspecified period.

She will also vote at this week's interest rate meeting, her first as a policymaker.

Governor Mark Carney said: "While I fully respect her decision... I deeply regret that Charlotte Hogg has chosen to resign."

The resignation leaves the Treasury scrambling to find an alternative. The position is one of just three deputies on all of the central bank's key committees for monetary policy, regulation and financial stability.

Mr Carney will also need to find another COO as he starts a second strategic overhaul of the bank.

Ms Hogg is not the first BOE figure to face criticism in recent years. Lawmakers twice raised concerns about financial policy committee member Clara Furse, who stepped down from the role last year, and in 2015 policymaker Gertjan Vlieghe was pressured to sever ties with Brevan Howard Asset Management to avoid the impression of a conflict of interest. Lawmakers also criticised the BOE's code of conduct then.

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A version of this article appeared in the print edition of The Straits Times on March 15, 2017, with the headline 'Top BOE official steps down after flak from lawmakers'. Print Edition | Subscribe