Carney asked to review MPC code

A leading UK member of parliament has called on Bank of England governor Mark Carney to review the code of conduct for members of the monetary policy committee (MPC) today (August 24), after the latest appointee, Gertjan Vlieghe, decided to shed his financial interest in asset manager Brevan Howard before joining the rate-setting body next month.

Vlieghe will join the MPC on September 1 as an external member, from Brevan Howard, where he was a partner and senior economist. He initially intended to retain a financial interest in the company – deemed acceptable by the Treasury and the Bank of England.

However, three days after his appointment was announced, Vlieghe committed to unwinding that interest, despite believing there was no conflict of interest between that and his forthcoming role on the MPC.

Carney commented on the decision during a press conference earlier this month, noting Vlieghe acted "to eliminate any possible misperception of a conflict". The governor went on to "commend him for it".

He explained the initial arrangements were nonetheless consistent with the MPC's code of conduct because it was a "passive stake" in Brevan Howard. This has prompted Andrew Tyrie, chairman of the UK's Treasury Committee, to ask Carney to review the code.

"It is essential that those appointed to the MPC have not conflicts of interest, nor perception of them. A well designed code of conduct, sensibly applied, should be capable of achieving this without diminishing the quality of applicants," he wrote, in a letter to the governor.

"I am writing to ask that you undertake a review of the code of conduct and let the Treasury Committee know your progress with it."

A Bank of England spokesperson said they had received the letter and would respond in due course.