BOE Will Reconsider Code of Conduct After Vlieghe Controversy

  • Central bank board to consider MPC code at October meeting
  • Tyrie: ``Something seems to have gone somewhat wrong here''

The Bank of England’s governing body will give “serious consideration” to the institution’s code of conduct for policy makers after controversy linked to the appointment of Gertjan Vlieghe in July, its chairman said.

The BOE’s Court of Directors will review the code for the Monetary Policy Committee at the October meeting of its audit committee, Anthony Habgood told lawmakers in London Wednesday. The standards were last reviewed around May this year, and “in the light of your concern about it, we will review it again,” he said.

Vlieghe was an economist at Brevan Howard Asset Management when his appointment was announced in July, and he took up the role this month. He had initially planned to withdraw from any active interest in Brevan Howard, but retain his rights to a share of future payouts.

While Vlieghe maintained that there was no conflict of interest, lawmakers indicated they had some concerns about the decision. He severed ties with the hedge fund days after his appointment to avoid “any mistaken impression” of a conflict. Andrew Tyrie, chairman of the Parliamentary committee that scrutinizes the bank, said a new code should be careful not to needlessly prevent talented people from joining the bank.

“It’s extremely important that people maintain a sense of balance about these conflicts of interest,” Tyrie said. “Nonetheless, something seems to have gone somewhat wrong here. The perception, whatever the reality, caused some difficulty.”

Tyrie had written to Carney in August asking for the code of conduct for policy makers to be reviewed, and for a report on the progress of the review.

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