Bank of England deputy under fire over undeclared conflict of interest

[March 07, 2017]  By David Milliken and Andy Bruce

LONDON (Reuters) - New Bank of England Deputy Governor Charlotte Hogg came under fire from the central bank's supervisors and lawmakers on Tuesday, after she admitted failing to declare to the central bank a potential conflict of interest from her brother's role at Barclays <BARC.L>, a major bank overseen by the BoE.

Hogg joined the BoE in 2013 and was named as a deputy governor in February.

But she said in a letter published on Tuesday that she only highlighted her brother's role in Barclays' strategy office when she submitted documentation to a parliamentary committee before it reviewed her appointment last week.

Under questioning from a parliamentary committee on Tuesday, the chair of the BoE's supervisory body said Hogg's failure to inform him of her brother's role was "very serious". A lawmaker said it raised major doubts about the BoE's internal procedures.

Hogg joined the BoE nearly four years ago as its chief operating officer. In her new role, she will be responsible for overseeing financial markets including the bank's massive bond-buying stimulus program. She will also sit on committees overseeing British-based banks.

"I should have formally declared my brother's role when I first joined the Bank. I did not do so and I take full responsibility for this oversight," Hogg said in a letter to the committee released on Tuesday.

Parliament's Treasury Committee, which last week told Hogg she needed to take steps to tackle the possible conflict of interest created by her role, released the letter on Tuesday. In it, Hogg said she had been wrong to tell the committee on Feb. 28 that she had fully informed the BoE of her brother's role.

Anthony Habgood, the chairman of the BoE's Court of Directors, which is responsible for the central bank's strategy, told lawmakers on Tuesday that Hogg's omissions were "a very serious breach" of the BoE's compliance rules.

But Habgood's deputy, Bradley Fried, said Hogg's errors did not amount to a "hanging offence" and should be considered in the context of her otherwise good performance at the BoE. Habgood said there had been no actual conflict of interest.

Hogg's appointment does not require approval by parliament.

Jacob Rees-Mogg, a Conservative lawmaker on the committee who has often been critical of the BoE under Governor Mark Carney, said he was concerned by their response.

"What's worrying me is that the Bank is, or the Court is, pretty complacent about this," he said. "It's that ... 'we wont' investigate it, we'll just say there's no conflict because the brother, he's probably like us, he's another good chap'."

"I've moved on from being concerned about Ms Hogg's error to being concerned about the Bank's reaction - and that the Bank's reaction has been pretty unrigorous, it's taking bland assurances and passing them on to us," Rees-Mogg said.

Hogg said in her letter she would ask the BoE's three main policy committees, on which she now sits, to review if further steps were needed to manage the potential conflict of interest.

(Writing by David Milliken; Editing by William Schomberg)

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