Bank of England's Hogg steps down after lawmaker criticism

LONDON (BLOOMBERG) - Charlotte Hogg resigned from the Bank of England after criticism from lawmakers 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's learned from two potential conflict of interest issues in the past few years. Ms Hogg, chief operating officer since 2013, took over as deputy governor for markets and banking at the start of this month, which includes responsibilities for bank supervision.

The statement followed a report from Parliament's Treasury Committee that said that Ms Hogg's "professional competence falls short of the very high standards required to fulfill the additional responsibilities of Deputy Governor."

The 46-year-old revealed earlier this month that she had failed to report that her brother worked for Barclays when she was hired as COO, a role that oversaw compliance at the central bank. She also didn't 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 told a hearing on Feb. 28 that she had always declared potential issues.

Lawmakers had approved Ms Hogg's appointment on March 2. But on Tuesday, 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."

Previously head of retail distribution and intermediaries at Banco Santander's UK business, Ms Hogg joined the BOE in 2013 and was charged with revamping the three-century-old BOE and overseeing its day-to-day operations. She stayed as COO when she became deputy governor, and will remain in her roles for a unspecified period. She will also vote at this week's interest-rate meeting, her first as a policy maker.

"While I fully respect her decision taken in accordance with her view of what was the best for this institution, I deeply regret that Charlotte Hogg has chosen to resign," Governor Mark Carney said in a statement. The bank "is stronger, more diverse, secure and effective in large part because of Charlotte Hogg."

The resignation leaves the Treasury scrambling to find an alternative person. The position is one of just three officials on all of the BOE's key committees for monetary policy, regulation and financial stability. It also risks leaving the BOE with no women on its Monetary Policy Committee after external member Kristin Forbes said she intends to leave at the end of June.

Mr Carney will also need to find another COO as he starts a second strategic overhaul of the bank. He's due to roll out a three-year plan in the next few months.