Bank chief’s ‘regret’ as deputy Charlotte Hogg quits over code of conduct breach
15 March 2017
The Bank of England's newly-appointed deputy governor has resigned after coming under fire for breaking the Bank's code of conduct by failing to declare that her brother worked for Barclays.
Charlotte Hogg offered a voluntary resignation last week, before insisting in a letter to Bank governor Mark Carney on Monday that she must step down from her post.
Her resignation letter was made public on Tuesday, just moments after the House of Commons Treasury Select Committee published a report stating that her "professional competence falls short" of the standards required to fulfil her role as the Bank's deputy governor for markets and banking.
The move has prompted the Bank to overhaul its "internal structures" and launch a review to ensure its "most senior levels" abide by the code.
Responding to her resignation, Mr Carney said: "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 from the Bank of England.
"Since Charlotte joined the Bank almost four years ago, she has transformed its management and operations."
Ms Hogg had apologised to the Committee for not formally disclosing that her brother, Quintin, was Barclays' group strategy director, which could conflict with her work on the Prudential Regulation Committee (PRC).
She had failed to declare the family link on numerous occasions since joining the Bank as chief operating officer in 2013, including when she applied to the Treasury to become deputy governor.
Ms Hogg, who was touted as a potential successor to Mr Carney, had told the Committee during a hearing that she always declared areas of conflicts of interests and was compliant with all of the Bank’s codes of conduct because she helped to write them.
Writing to Mr Carney and Anthony Habgood, chairman of the Bank’s Court, Ms Hogg said: “Last week I offered you my resignation in recognition of the fact that I made a mistake in not declaring my brother’s work on the forms that the Bank requires. It has become clear to me that I should now insist.
“As I have said, I am very sorry for that mistake. It was an honest mistake: I have made no secret of my brother’s job – indeed it was I who informed the Treasury Select Committee of it, before my hearing.
“But I fully accept it was a mistake, made worse by the fact that my involvement in drafting the policy made it incumbent on me to get all my own declarations absolutely right.”
Ms Hogg took up the role as deputy governor for markets and banking at the beginning of March, overseeing the Bank’s balance sheet and sitting on the Monetary Policy Committee (MPC), the Financial Policy Committee (FPC), the PRC and the Court of the Bank of England.
The PRC has direct responsibility for regulating banks, including Barclays.
Her resignation came shortly after the Treasury Committee published a damning report which criticised her mistakes, but stopped short of recommending she be axed from her role.
The influential committee, headed by Tory MP Andrew Tyrie, said she had failed “over a period of nearly four years to comply with the code of conduct, despite numerous procedural reminders and opportunities to do so”.
It said Ms Hogg had not “led by example” and it took umbrage with a letter sent by her in which she stated that her brother’s role would not present a conflict of interest in the future.
“The Committee considers that such a potential, actual or perceived conflict could well arise.”
It said her conclusion was “a serious error of judgment”.
Ms Hogg is not expected to stand down from her role immediately and will play a part in the MPC meeting on Thursday.
While she performed her deputy governor duties on top of her role as chief operating officer, it is understood that these positions are likely to be carried out by two people in the future.
In a tweet following her resignation, former chancellor George Osborne said: “Charlotte Hogg is a real loss to public life.
“Would she have gone if she had been an older man whose sister worked at a bank? I wonder…”