Gertjan Vlieghe, the newly appointed member of the Bank of England’s rate-setting committee, will sever ties with Brevan Howard Asset Management to avoid any impression of a conflict of interest.
The economist, who joins the Monetary Policy Committee on Sept. 1, will sell his remaining interest in the partnership before taking up his BOE position, he said on Friday. He had previously planned to withdraw from any active interest in Brevan Howard, but retain his rights to a share of future payouts.
“Despite the fact that there would be no conflict of interest between my future role and any continued passive stake in Brevan Howard, we have now come to an agreement whereby I shall be bought out of my remaining interest,” Vlieghe said in an e-mailed statement. “I have taken this step to avoid any mistaken impression of a conflict of interest.”
The move follows comments from Andrew Tyrie, the chairman of Parliament’s Treasury Committee, that it’s “essential” policy makers are independent and “seen to be” independent. Tyrie had said the matter would be raised at Vlieghe’s appointment hearing before the cross-party panel.
Vlieghe, who once worked at the central bank as an adviser to then Governor Mervyn King, will serve an initial three-year term at the BOE. The central bank’s code of conduct says policy makers “may not retain any directorship, trusteeship, advisory post or other interest, whether or not remunerated” if it could conflict with their MPC membership.
Vlieghe’s initial arrangement with Brevan Howard was consistent with the BOE’s requirements for personal financial transactions, a person familiar with the matter said. Tyrie also said judgment should be used when applying BOE conduct rules to ensure the MPC can include a variety of expertise.