Sunday, 12 March 2017

BOE Deputy Governors Future Now Hanging In The Balance

Charlotte Hogg

The future of the deputy governor of the Bank of England is in the balance this weekend as MPs weigh up whether to issue a stinging rebuke to Charlotte Hogg, the second most powerful official at the Bank.

Pressure has been mounting on Hogg, who only took over as deputy on 1 March, since her admission last week that she failed to disclose a potential conflict of interest over her brother’s position as a key Barclays bank executive.

Hogg had told MPs that the Bank, run by governor Mark Carney, was aware of Quintin Hogg’s role at the high street lender. However, days later she was forced to write to the Treasury select committee to admit she had not told colleagues of her brother’s job as Barclays’ director of strategy when she joined the institution in 2013. One of the key roles of the Bank of England is to police other banks.

A scion of one of Britain’s most blue-blooded political families, 46-year-old Hogg faces the possibility that MPs on the select committee will cast doubt on her suitability to hold her job.

The MPs have already discussed asking the Bank to cancel her promotion and are expected to meet on Monday to determine what action to take. The MPs only have an advisory role with regard to Bank appointments, but their opinion is influential.

As deputy governor, Hogg is responsible for monitoring markets and banking, and has also kept her previous job as the bank’s chief operating officer, in charge of day-to-day management at the 300-year-old institution. In that role she helped to write the Bank’s conflict of interest guidelines, which she has contravened.

When the controversy erupted last week, Carney moved to draw a line under the matter by issuing Hogg – regarded as a leading candidate to succeed him – with a rare verbal warning. However, John Mann, a Labour MP who sits on the Treasury committee, described her position as untenable.

Few other members of the committee have spoken out publicly, but its chairman, Andrew Tyrie, said MPs would offer an opinion on whether she should go “after a period of reflection”. At least one MP has privately pledged to support her but another told the Financial Times: “It’s not looking good for her. She has been hoist by her own petard.”

Members of the Bank’s court, the equivalent of a board of directors which oversees its running, have acknowledged the seriousness of the situation. Bradley Fried, the court’s deputy chairman, told MPs at a hearing on Tuesday it would go down as “a watershed moment in Ms Hogg’s professional and public life”.

Jacob Rees-Mogg, the Conservative MP who sits on the committee, told the Guardian his focus was on the Bank’s governance. “I think the court looked complacent when it came before the committee last week which reopened issues about the bank’s governance that are more important than Charlotte Hogg’s mistake,” he said.

David Blanchflower, professor of economics at Dartmouth College in the US and a former Bank policymaker, doubted she would survive, saying: “I think she will have to be a sacrificial lamb.”

But Lord Myners, a former member of the court and an ex-City minister, said: “For some people this will raise questions about the role of the court ... I do not think this error is sufficient to disqualify her from her job.”

A week ago, the MPs issued a report on Hogg’s role in which they said there were worried about groupthink at the Bank and “concerned about the need to develop diversity of view”.

The Treasury declined to comment on Friday, but at the time of her appointment the chancellor, Philip Hammond, said Hogg had “exceptional leadership skills and wide ranging experience.” .



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