Bank of England deputy governor Charlotte Hogg may come under pressure to resign this week as Parliament’s Treasury Committee prepares to pass judgement on her appointment.
Lawmakers were scheduled to convene later yesterday to discuss Hogg’s role as head of markets and banking, which she started this month. They’re reviewing her position after she admitted she didn’t disclose to the central bank that her brother works at Barclays, which it regulates.
Hogg, who has also been chief operating officer at the BoE since 2013, is set to cast her first vote on monetary policy this week. Lawmakers can’t block the appointment, but they can recommend against it. Hogg, while not chiefly in charge of regulating banks, sits on a committee with responsibilities for supervision.
The issue also casts a shadow over the BoE’s governance structure, at a time when policy makers under Governor Mark Carney are already being criticised by politicians — including some members of the Treasury Committee — for comments and forecasts made around the UK’s vote to leave the European Union.
Committee member Jacob Rees-Mogg, who has frequently sparred with Carney, said last week that “we’ve gone from being concerned about Hogg’s error, to being concerned about the bank’s response.”
Hogg’s brother Quintin Hogg works as a director at Barclays Investment Bank. She told a hearing on February 28 that she had always declared potential issues to the central bank, and lawmakers approved her appointment on March 2, while saying steps would need to be taken to address possible conflicts of interest.
On March 7, lawmakers published a letter from Hogg saying that, in fact, she hadn’t disclosed the potential conflict when she started as COO, nor in her application for deputy governor, and it only came to light when she completed a questionnaire for the committee. She apologised in the letter, saying that she takes “full responsibility for this oversight.”
Committee member John Mann tweeted on Sunday that “Pressure on Charlotte Hogg to resign as Bank of England no 2 is increasing not diminishing.” The Sunday Times reported that some commercial bankers have said if Hogg remains in her post, they will use that as an argument that they should also be treated more leniently in similar circumstances.
A BoE spokesman declined to comment.
“It’s a bit of headache,” said Alan Clarke, an economist at Scotiabank in London, noting that until now all the questions about Hogg’s appointment were whether she was going to be a hawk or a dove on interest rates. She is a “pretty important internal member with a massive mandate. It doesn’t look great.”
The Treasury Committee has recommended against BoE appointments in the past. It advised against Christopher Allsopp in 2000, arguing that his responses to its questions suggested he may not be able to stand up to senior members of the bank. Then-Chancellor of the Exchequer Gordon Brown stood by him and he went on to serve a full term.
In July 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 criticised the BoE’s code of conduct at the time.
In Hogg’s case, there may be even more at stake because she is seen as being close to Carney and has played a prominent role at the central bank in recent years, including leading a strategic overhaul, according to Grant Lewis, an economist at Daiwa Capital Markets and a former Treasury official.
“It’d be a great shame if she did have to go because clearly for the management, strategy role, she’s highly regarded,” Lewis said in a telephone interview. “She’s had a high-achieving career and is the sort of person I’m sure the bank wants to attract.”