London: Charlotte Hogg resigned from the Bank of England (BoE) 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. 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 statement followed a report from Parliament’s Treasury Committee that said that Hogg’s “professional competence falls short of the very high standards required to fulfil the additional responsibilities of deputy governor.”
The 46-year-old Hogg 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 Major, and her grandfather and great-grandfather were both lord chancellors, heading the judiciary.
Her brother Quintin Hogg is a director at Barclays Plc, and 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 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 28 February that she had always declared potential issues.
Lawmakers had approved Hogg’s appointment on 2 March. 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 SA’s UK business, 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 deputies 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.
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. The BOE said today it’s changing reporting lines to safeguard the code of conduct and has commissioned a review, the results of which will be made public.
Following her resignation, Treasury Committee chairman Andrew Tyrie described it as a “regrettable business with no winners” and welcomed the central bank’s review, saying lawmakers would examine its conclusions.
Hogg is not the first BOE figure to face criticism from the Treasury Committee 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 policy maker Gertjan Vlieghe was pressured to sever ties with Brevan Howard Asset Management to avoid the impression of a conflict of interest. Lawmakers also criticized the BOE’s code of conduct at the time.
Hogg is the first deputy governor since the BOE’s independence in 1997 to resign under pressure. In 1995, deputy governor Rupert Pennant-Rea quit after it was reported he had an affair with a journalist.
The Treasury Committee recommended against a BOE appointment in 2000, saying that Christopher Allsopp may not be able to stand up to senior members of the bank. Then-Chancellor of the Exchequer Gordon Brown backed him and he went on to serve a full term. Bloomberg