Charlotte Hogg, the new deputy Governor of the Bank of England, broke the Bank’s official internal code of conduct when she failed to declare to the Threadneedle Street authorities that her brother worked for Barclays.
The chair of the Bank’s Court, Anthony Habgood, on Tuesday declared this a “very serious breach”, "extremely regrettable" and added that “it doesn’t look good”.
It emerged at a confirmation hearing before the Treasury Select Committee on 28 February that Ms Hogg’s brother, Quintin, worked for Barclays as a “director in group strategy”.
Ms Hogg, who is now the Deputy Governor in charge of markets and banking, told the TSC that she had already disclosed this fact to the Bank’s authorities.
But in the wake of the TSC hearing the Bank and Ms Hogg checked the Bank's internal record and discovered that this was incorrect and the there was no record of her brother's job.
Under the Bank’s code, Ms Hogg should have disclosed the potential conflict of interest when she joined the Bank of England as Chief Operating Officer in 2013.
"Regrettably, my oversight means that my oral evidence to the Committee in this respect was not accurate," wrote Ms Hogg in a letter to the TSC and offered her "sincere apologies".
Mr Habgood told the TSC on Tuesday he believed it had been an "honest mistake".
Bradley Fried, deputy chair of the Court, also defended Ms Hogg under questioning by the TSC.
“I definitely don’t believe it’s a hanging offence,” he said.
Ms Fried added he would "struggle" to see the breach as grounds for rescinding Ms Hogg's appointment to the deputy governor position.
The Bank's code states that: "A relationship with a person or organisation outside the Bank should be disclosed where it may lead (or could be perceived to lead) to a conflict of interest or advantage – close personal relationships with those active in financial, economic or political journalism, Bank-regulated financial institutions and significant dealings with counterparties of the Bank or Bank suppliers, such as banknote printers or caterers, should all be disclosed."
"This will allow us to ensure that we are not put in situations where close personal relationships might be viewed as affecting our judgement, or where we could be perceived to have shared Bank information for advantage."
In her evidence to the TSC last week Ms Hogg said she "didn't know" what her brother did at Barclays before she asked him for the purposes of filling in a questionnaire provided by the committee.
"I don't discuss work with him and he doesn't discuss it with me. We mostly talk about his children," she said.
The chair of the TSC revealed Tuesday that Ms Hogg's brother's role had been been to examine regulatory changes, ring-fencing rules and capital requirements.
Ms Hogg's father is Viscount Hailsham, a former Cabinet minister in the 1990s.
Her mother is Baroness Hogg, a former head of Sir John Major's Downing Street Policy Unit and chair of 3i Group.
