MPs to grill Bank of England officials over conflicts 'shortcomings'
Bank of England officials could be quizzed by MPs over new governance standards after deputy governor Charlotte Hogg was forced to resign for failing to declare her brother worked for Barclays.
Nicky Morgan, chair of the influential Treasury Select Committee, has hinted the Bank's Court of Directors will be asked to give evidence on the lessons learned from the embarrassing saga, which saw Ms Hogg step down just two weeks into her post.
It comes after the Bank announced on Wednesday it would appoint a conflicts officer to pinpoint potential conflicts of interest after identifying "shortcomings" as part of in-depth review.
She said: "As the Treasury Committee concluded in the last Parliament, the circumstances surrounding Charlotte Hogg's resignation exposed a number of shortcomings in the way that the Bank manages conflicts of interest.
"It is right that the Bank commissioned a review to examine these.
"I expect that the Committee will want to hear from the Court of Directors to discuss the lessons that have been learned, and how they intend to implement the review's recommendations.
"I also expect the Committee to hold an appointment hearing for Ms Hogg's replacement, Sir David Ramsden, at an early opportunity."
The review into conflicts of interests procedures was carried out by the Bank's non-executive directors in conjunction with lawyers at Herbert Smith Freehills.
It is understood a Bank executive will take on the conflicts officer position as an additional responsibility and is not expected to be paid extra money for the role.
The Old Lady of Threadneedle Street is also exploring whether to develop a central system for capturing and reviewing data on relationships and conflicts.
Bank governor Mark Carney welcomed the review and said the findings would be implemented in full.
He said: "The Bank holds itself to the highest standards, which is why it is important to address any actual or perceived deficiencies in our approach to managing conflicts of interest.
"In addition to ensuring that we meet best practice, addressing the review's recommendations will give everyone who works at the Bank greater clarity on what is expected, and will help reassure all of those to whom we are accountable that we have an effective and robust approach to conflicts management."
A scathing verdict in a report by MPs on the Treasury Select Committee found Ms Hogg's "professional competence falls short" of the standards required for the role after the conflict of interest breach.
The omission saw her fall foul of the code of conduct rules she helped to draw up at the Bank.
Treasury veteran Sir Dave Ramsden was named as Ms Hogg's replacement at the end of last month, taking the role of deputy governor for markets and banking.
Sir Dave, who led the Treasury's work on whether the UK should join the euro at the turn of the century, will also join the Bank's rate-setting Monetary Policy Committee (MPC).
Bradley Fried, deputy chairman of the Bank's Court who led the review, said: "This has been a thorough process, involving Bank of England staff and input from Herbert Smith Freehills LLP and the National Audit Office.
"The priority has been to publish at the earliest possible opportunity a comprehensive review, aligned to independent best practice benchmarks."
The Bank, which is due to publish an updated code of conduct in the autumn, said it was working with the Treasury to improve conflict of interest checks around recruiting senior staff to the Court and policy committees.