Five failings led to Charlotte Hogg debacle, Bank of England review finds

Problems started from informal recruitment process when former deputy governor was hired in 2013

Bank of England
(Image credit: Getty)

Five "shortcomings" in recruitment processes four years apart were responsible for the Charlotte Hogg scandal at the Bank of England, a review has concluded.

The former Santander executive was hired as the bank's chief operations officer in 2013, following an earlier stint dating back to 1993.

She was promoted to deputy governor earlier this year, but had to resign three weeks later after the Treasury select committee published a scathing report questioning her competence.

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At issue was the "accidental" failure to properly disclose that her brother held a top role at Barclays, a potential conflict of interest as it is supervised by the Bank of England, says the Daily Telegraph.

A review commissioned by the bank found problems started when Hogg was hired in 2013 and conflicts of interest were disclosed "during a brief exchange of emails" with the chairperson of the Court of the bank, effectively its board of directors.

"This was not atypical for such a senior appointment at the time," it says, reports the Financial Times.

The review also criticised the existing code of conduct, co-written by Hogg, which does not set out when relationships need to be declared and which required candidates to state compliance but not to check through their declarations.

In addition, when she applied to be deputy governor, the bank did not pass on a recruitment form in which Hogg failed to declare the potential conflict, nor did it check its records after she later disclosed the relationship before the Treasury committee.

The report's recommendations, which Bank of England governor Mark Carney said will be implemented in full, include making the role of head of compliance more senior and handing a senior manager new powers as a "conflicts officer".

This will "include interviewing top bosses, including Mark Carney, at least once per year to make sure their declarations of interests are up to fate", says the Telegraph.

The bank has also been told to put in place a new computer system that will "act as one central repository" for compliance declarations and to update its code of conduct to set out which specific relationships should be declared.

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