The Treasury select committee is preparing to challenge newly appointed member of the Bank of England’s monetary policy committee, Gertjan Vlieghe, to prove his independence from the hedge fund Brevan Howard, where he is a partner.
Andrew Tyrie, the Conservative MP who chairs the cross-party committee of MPs, said: “It is essential that the MPC is – and is seen to be – independent. The Treasury committee will be seeking reassurance that Mr Vlieghe’s business interests do not pose a conflict with his membership of the MPC when he comes for an appointment hearing in the autumn.”
Vlieghe’s appointment as one of the four external members of the MPC was announced earlier this week when the chancellor, George Osborne, said the hedge fund economist would replace David Miles on the rate-setting committee from September. It is a three-year term.
Reuters reported that Vlieghe would retain a financial interest in a Brevan Howard vehicle, allowing him to receive long-term incentive payments based on the hedge fund’s size.
The Treasury said he had “withdrawn from any active interest in the firm”. It added: “All MPC members are bound by the MPC’s code of conduct. As is usual practice when making external appointments of this nature, potential conflicts of interest are considered by the Treasury and the Bank of England, and the MPC code of conduct is applied rigorously at all times.”
One source told Reuters: “He ceases to be an active partner, but he continues to have a residual interest. He is not an active partner, so the idea of a conflict does not come into it.”
Tyrie added: “It is also important that judgment is exercised in the application of rules covering such possible conflicts of interests to ensure that the MPC can have access to the widest relevant expertise.”
Brevan Howard directed queries to the Treasury.
