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Andrew Tyrie criticises Bank of England for failing to protect Gertjan Vlieghe Andrew Tyrie criticises Bank of England for failing to protect Gertjan Vlieghe
(about 1 hour later)
Andrew Tyrie, the chairman of the Treasury select committee, has criticised the Bank of England for failing to protect the newest member of its monetary policy committee, Gertjan Vlieghe, against accusations of a conflict of interest.Andrew Tyrie, the chairman of the Treasury select committee, has criticised the Bank of England for failing to protect the newest member of its monetary policy committee, Gertjan Vlieghe, against accusations of a conflict of interest.
Vlieghe, who had been a partner at hedge fund manager Brevan Howard, initially planned to retain a financial interest in the firm on taking up his appointment to the nine-member policymaking committee as an independent expert.Vlieghe, who had been a partner at hedge fund manager Brevan Howard, initially planned to retain a financial interest in the firm on taking up his appointment to the nine-member policymaking committee as an independent expert.
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However, he relinquished his stake on 31 July after public pressure over a potential conflict of interest, despite advice from the Bank that holding it would not break its code of conduct.However, he relinquished his stake on 31 July after public pressure over a potential conflict of interest, despite advice from the Bank that holding it would not break its code of conduct.
Vlieghe faced a confirmation hearing with the cross-party committee of MPs on Tuesday. Issuing a statement on Thursday, Tyrie said: “From the evidence the committee took, it appears that the Bank would have done better to advise Dr Vlieghe to sell his stake in Brevan Howard prior to taking up his appointment. As he said in evidence, the holding created an impression, whether mistaken or not, of a conflict of interest, and he was right to shed it.”Vlieghe faced a confirmation hearing with the cross-party committee of MPs on Tuesday. Issuing a statement on Thursday, Tyrie said: “From the evidence the committee took, it appears that the Bank would have done better to advise Dr Vlieghe to sell his stake in Brevan Howard prior to taking up his appointment. As he said in evidence, the holding created an impression, whether mistaken or not, of a conflict of interest, and he was right to shed it.”
The Bank’s court – the body that oversees its governance – has promised to review the code of conduct for MPC members in the light of Vlieghe’s experience, after pressure from the select committee. The Bank’s governor, Mark Carney, had initially suggested that a review was not necessary.The Bank’s court – the body that oversees its governance – has promised to review the code of conduct for MPC members in the light of Vlieghe’s experience, after pressure from the select committee. The Bank’s governor, Mark Carney, had initially suggested that a review was not necessary.
Tyrie said: “It is essential that enough flexibility is retained in the MPC’s code of conduct to enable high quality candidates from the private sector to do these jobs. The Bank’s committees can greatly benefit from their expertise. It is equally essential that judgement is exercised in the application of the code.”Tyrie said: “It is essential that enough flexibility is retained in the MPC’s code of conduct to enable high quality candidates from the private sector to do these jobs. The Bank’s committees can greatly benefit from their expertise. It is equally essential that judgement is exercised in the application of the code.”
However, the committee approved Vlieghe’s appointment, and also supported the reappointment of Ian McCafferty, the former CBI economist who has been granted a second three-year term on the MPC.However, the committee approved Vlieghe’s appointment, and also supported the reappointment of Ian McCafferty, the former CBI economist who has been granted a second three-year term on the MPC.
McCafferty has since August been the only MPC member voting for an immediate increase in interest rates from their record low of 0.5%.McCafferty has since August been the only MPC member voting for an immediate increase in interest rates from their record low of 0.5%.